Question

The manger of a manufacturing company recently hired an economist to estimate the firm’s production function....

The manger of a manufacturing company recently hired an economist to estimate the firm’s production function.

based on the economist report. The manager now knows that the firm production function is given by Q=K^3/4^L^1/^4 and that capital is fixed at 81 unit.

a) calculate the average product of labor when 16 units of labor are utilized

b) calculate the marginal product of labor when 16 units of labor are utilized

c)suppose the firm can hire labor at a wage of $10 per hr and output can be sold at a price of 100 per unit.

determine the profit maximizing levels of labor and output.

d) what is the maximum price of capital at which the firm will still make nonnegative profit?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Dear Student/ Learner, it was my great pleasure to help you solving this problem. I wish you best luck for your learning endeavour.
Happy Learning

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’s production function is: Q = 6K1/3 L2/3. Suppose that capital is fixed at 125...
A firm’s production function is: Q = 6K1/3 L2/3. Suppose that capital is fixed at 125 units. If the firm can sell its output at a price of $200 per unit, hire labor at $20 a unit, and rent capital at $40 a unit, how many units of labor should the firm hire to maximize profits?Given your answer, what is the level of output that maximizes profits? Lastly, calculate the level of profits at the profit-maximizing level of labor and...
A firm can manufacture a product according to the production function Q = F (K, L)...
A firm can manufacture a product according to the production function Q = F (K, L) = K0.75 L0.25 a. What is this type of function called? Are the inputs perfect substitutes or should they be used in a fixed proportion instead? © (3pts) b. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and wage is $50, how many units of labor should the firm hire in...
A firm can manufacture a product according to the production function Q = F (K, L)...
A firm can manufacture a product according to the production function Q = F (K, L) = K0.75 L0.25 a. What is this type of function called? Are the inputs perfect substitutes or should they be used in a fixed proportion instead? © (3pts) b. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and wage is $50, how many units of labor should the firm hire in...
firm can manufacture a product according to the production function Q = F (K, L) =...
firm can manufacture a product according to the production function Q = F (K, L) = K0.75 L 0.25 a. What is this type of function called? Are the inputs perfect substitutes or should they be used in a fixed proportion instead? © (3pts) b. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and wage is $50, how many units of labor should the firm hire in...
A firm uses capital and labor to produce output according to the production ? = 4√??...
A firm uses capital and labor to produce output according to the production ? = 4√?? (a) Find the marginal product of labor (MPL) and marginal product of capital (MPK). (b) If the wage w=$1/labor-hr. and the rental rate of capital r=$4/machine-hr., what is the least expensive way to produce 16 units of output? (c) What is the minimum cost of producing 16 units? (d) Show that for any level of output, q, the minimum cost of producing q is...
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...
A firm has a daily production function q = 2.5L^1/3K^1/3. Currently, the firm rents 8 pieces...
A firm has a daily production function q = 2.5L^1/3K^1/3. Currently, the firm rents 8 pieces of equipment. The amount of equipment is fixed in the short run. The unit wage rate is $25 while the rental cost of capital is $100. Find the short run production function. Find the number of workers the firm wishes to employ to produce q units (the short run conditional demand for labor). Find the firm’s short run total cost Find the firm’s short...
Firm A’s production function and cost line are given by:Q=Q(L,K)=2 L^(1/2) K^(1/2) (The production function)...
Firm A’s production function and cost line are given by:Q=Q(L,K)=2 L^(1/2) K^(1/2) (The production function)?L+?=30000 (The cost line of firm A):?L is the amount of labor hired.?K is the amount of capital hired.??p_L or the price of labor is 1 dollar per unit.??p_K or the price of capital is 1 dollars per unit.C or cost (think of it as the firm’s budget) is 30000 dollars.How much labor and capital should this firm optimally hire?
Suppose a monopolist has a production function given by Q = L1/2K1/2. Therefore,MPL = , and...
Suppose a monopolist has a production function given by Q = L1/2K1/2. Therefore,MPL = , and MPK = 2/12/12LK2/12/12KLThe monopolist can purchase labor, L at a price w = 16, and capital, K at a price of r = 9. The demand curve facing the monopolist is P = 360 – 2Q.a) (8 points) What is the monopolist’s total cost function? b) (4 points) How much output should the monopolist produce in order to maximize profit?c) (6 points) How much...
14. A firm’s production function is Q = 12*L0.5*K0.5. Input prices are $36 per labor unit...
14. A firm’s production function is Q = 12*L0.5*K0.5. Input prices are $36 per labor unit and $16 per capital unit. The product’s price is P = $10. (Given: MP(L) = 6*L-0.5*K0.5; and MP(K) = 6*L0.5*K-0.5) In the short run, the firm has a fixed amount of capital, K = 9. Calculate the firm’s profit-maximizing employment of labor. (Note: short term profit maximization condition: MPR(L) = MC(L) ) In the long run, suppose the firm could adjust both labor and...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT