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Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of output is constant at $50 per

Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of output is constant at $50 per unit. The production function is

f(E,K) = EK ,

so that the marginal product of labor is

MPE = ()(K/E) .

If the current capital stock is fixed at 1,600 units, how much labor should the firm employ in the short run?How much profit will the firm earn?

Where would you plug 1600 into. What variables are unknown. How is this question computed.

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