1. A firm pays per worker (L) $11. The price of output is constant at $10 per unit. The production function is: Q = L What is the profit function? b) Determine the MPL c) Based on the profit function presented in (a), what are the two conditions that must be held simultaneously to have a profit greater than zero? d) Given the conditions in (c), is this firm producing in the market? Explain
1. A firm pays per worker (L) $11. The price of output is constant at $10 per unit. The production function is: Q = L What is the profit function? b) Determine the MPL c) Based on the profit function presented in (a), what are the two conditions that must be held simultaneously to have a profit greater than zero? d) Given the conditions in (c), is this firm producing in the market? Explain
Chapter16: Labor Markets
Section: Chapter Questions
Problem 16.7P
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Transcribed Image Text:1. A firm pays per worker (L) $11. The price of output is constant at $10 per unit. The production
function is:
Q = L
What is the profit function?
b) Determine the MPL
c) Based on the profit function presented in (a), what are the two conditions that must
be held simultaneously to have a profit greater than zero?
d) Given the conditions in (c), is this firm producing in the market? Explain
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