Question
Suppose the production function for running shoes is given by Q=2sqrt{K}sqrt{L} Q =2 K L , where Q Q represents the quantity of running shoe
Suppose the production function for running shoes is given by Q=2\sqrt{K}\sqrt{L}Q=2KL, where QQ represents the quantity of running shoe pairs produced per day, KK represents daily capital input, and LL represents daily labor input. This implies that the marginal product of labor is given by MP_L=\frac{\sqrt{K}}{\sqrt{L}}MPL=LK. Suppose further that running shoes sell for $100 per pair and that workers are paid $200 per hour.
If in the short run capital is fixed at 100 units, then the firm's current workforce of 20 workers is either to large or to small?
.In fact, the firm should hire how many workers total to maximize their profits?
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