1. Charlie's Umbrellas has a production function given by Q = L0.5KO.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Charlie want to buy for each unit of labor? 2. The inverse demand curve for a monopolist changes from P = 100 - 2Q to P = 170 - 2Q, while the production costs and technology remains unchanged at w = 8, r = 10, K = 64 and Q = L0.5K0.5, After the %3| change in the demand curve, the short-run profit- maximizing quantity changes from ( blank1 - Numeric Answer) to (blank2 - Numeric Answer). Round to four decimal places, if necessary.

1. Charlie's Umbrellas has a production function given by Q = L0.5KO.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Charlie want to buy for each unit of labor? 2. The inverse demand curve for a monopolist changes from P = 100 - 2Q to P = 170 - 2Q, while the production costs and technology remains unchanged at w = 8, r = 10, K = 64 and Q = L0.5K0.5, After the %3| change in the demand curve, the short-run profit- maximizing quantity changes from ( blank1 - Numeric Answer) to (blank2 - Numeric Answer). Round to four decimal places, if necessary.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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