Question

The production technology of a firm is estimated to be Q = 100N + 10N2 –...

The production technology of a firm is estimated to be Q = 100N + 10N2 – N3, where N is labor input and Q is output. The firm has a budget constraint on hiring labor that limits it to no more than 15 units of labor. a. Formulate the optimizing problem of the firm. b. Find the solution to the problem and find the optimum Q and N. c. Due to a restrictive labor market condition, the firm can not hire more than 8 units of labor. Find the optimum Q and N under new market conditions. d. What is the value of the Lagrange multiplier? What does it imply?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A firm has a production function Y = (K0.3)*(N0.7). Given this production function, the marginal product...
A firm has a production function Y = (K0.3)*(N0.7). Given this production function, the marginal product of labor is given by MPN =0.7*(K0.3)*(N-0.3). Suppose that the firm uses 1 unit of capital for production, that is, K = 1. Additionally, suppose that the market wage is w = 0.35. Questions: a) Calculate the optimal number of workers the firm will hire. Round your answer to the closest integer. b) Suppose that the government subsidizes employment by 0.05 per worker (s...
Consider a firm with the following production technology q = k0.5l0.5. The market price of the...
Consider a firm with the following production technology q = k0.5l0.5. The market price of the firm’s product is 10, and the rental rates of capital and wage rate for labor are given, respectively, by 2 and 3. (e) If wage rate goes up to 4, what is the new level of profit maximizing labor? (f) Find the profit maximizing level
A Manufacturer has a weekly production function of Q=200KL - K² -20L² It is currently in...
A Manufacturer has a weekly production function of Q=200KL - K² -20L² It is currently in the short run, with capital fixed at K = 10. It sells its product in a perfectly competitive market for $25. It can hire all the labor it needs for $3, 000 per week. a. find the marginal product of labor b. find the marginal revenue product of labor c. Find the optimum amount of labor d. The situation is now in the Long...
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of...
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of units of output produced, l the number of units of labor input used and k the number of units of capital input used. This firm profit function is π = p·q(l,k) – w·l – v·k, where p is the price of output, w the wage rate of labor and v the rental rate of capital. In the short-run, k = 100. This firm hires...
A firm produces an output with the production function Q=K*L2, where Q is the number of...
A firm produces an output with the production function Q=K*L2, where Q is the number of units of output per hour when the firm uses K machines and hires L workers each hour. The marginal product for this production function are MPk =L2 and MPl = 2KL. The factor price of K is $1 and the factor price of L is $2 per hour. a. Draw an isoquant curve for Q= 64, identify at least three points on this curve....
Consider a firm using the production technology given by q = f(K, L) = ln(L^K) If...
Consider a firm using the production technology given by q = f(K, L) = ln(L^K) If capital is fixed at K = 2 units in the short run, then what is the profit maximizing allocation of output if the price of output and respective input prices of labor and capital are given by (p, w, r) = (2, 1, 5)?
A firm’s production technology is given by the production function q = 0.25 LK where L...
A firm’s production technology is given by the production function q = 0.25 LK where L represents labor hours, K machine hours and q the amount of output. The market wage and rental rates are, w= $16 and r = $256. The firm is operating in the long run where it can adjust both inputs. (b) Suppose that the firm wants to produce 100 units of output. Determine the cost minimizing combination of L and K. Calculate the resulting long...
A firm produces a product with labor and capital. Its production function is described by Q...
A firm produces a product with labor and capital. Its production function is described by Q = min(L, K). Let w and r be the prices of labor and capital, respectively. a) Find the equation for the firm’s long-run total cost curve as a function of quantity Q and input prices, w and r. b) Find the solution to the firm’s short-run cost minimization problem when capital is fixed at a quantity of 5 units (i.e., K = 5). Derive...
A cost-minimizing firm has the following production function: Q=LK+2M. Where L denotes Labor, K denotes Capital,...
A cost-minimizing firm has the following production function: Q=LK+2M. Where L denotes Labor, K denotes Capital, and M denotes Materials. The prices for the inputs are as follows: w=$4, r=$8, and m=$1. The firm is operating in the long run. Answer the following questions as you solve for the total cost of producing 400 units of output. Assume an interior solution (i.e. positive values of all inputs). a) Set up constrained optimization problem of the firm: b) Write out the...
1. In the short run, the firm ________ change the number of workers it employs but...
1. In the short run, the firm ________ change the number of workers it employs but ________ change the size of its plant. A) can; can B) can; cannot C) cannot; can D) cannot; cannot 2.Jill runs a factory that makes lie detectors in Little Rock, Arkansas. This month, Jill's 34 workers produced 690 machines. Suppose Jill adds one more worker and, as a result, her factory's output increases to 700. Jill's marginal product of labor from the last worker...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT