12. A firm uses capital and labour to produce widgets. In the short-run capital is fixed, while labour is variable. The short-run production function is X-L'+24L +240L Where X is the number of widgets produced in per week, and L is the number of workers employed. Each worker works a 40-hour week. The wage rate is $12 per hour. a. Calculate the range of values for L over which the firm is in stage I, stage Il and stage II b. what is the minimum product price at which the firm will operate in the short-run? c. The product price, over which the firm has no control, is such that the firm's maximum possible pure profit $ 1096 per week. In order to achieve that level of profit it must employ 16 workers. How much is the firm's total fixed cost?.

12. A firm uses capital and labour to produce widgets. In the short-run capital is fixed, while labour is variable. The short-run production function is X-L'+24L +240L Where X is the number of widgets produced in per week, and L is the number of workers employed. Each worker works a 40-hour week. The wage rate is $12 per hour. a. Calculate the range of values for L over which the firm is in stage I, stage Il and stage II b. what is the minimum product price at which the firm will operate in the short-run? c. The product price, over which the firm has no control, is such that the firm's maximum possible pure profit $ 1096 per week. In order to achieve that level of profit it must employ 16 workers. How much is the firm's total fixed cost?.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

12. A firm uses capital and labour to produce widgets. In the short-run capital is fixed,
while labour is variable. The short-run production function is
X-L'+ 24L2+ 240L
Where X is the number of widgets produced in per week, and L is the number of workers
employed. Each worker works a 40-hour week. The wage rate is $12 per hour.
a. Calculate the range of values for L over which the firm is in stage I, stage II and stage
II
b. what is the minimum product price at which the firm will operate in the short-run?
c. The product price, over which the firm has no control, is such that the firm's
maximum possible pure profit $ 1096 per week. In order to achieve that level of profit it
must employ 16 workers. How much is the firm's total fixed cost?.

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