Suppose that your capital is fixed $($you have what you have, you cannot get rid of it or

purchase and install more in the short$-$run$)$ so that production in the short$-$run is given

simply by $=$

$1/2$

$.$ This implies that $=$

$1$

$2$

$$

$$

$1$

$2$ or $=$

$1$

$2$

$($which ever you

prefer$).$ Suppose you sell Q at price$=15$ and you hire labor at wage$=2\mathrm{.}5.$ Solve for the

profit maximizing amount of labor. How much quantity is produced? How much profit do

you make?