A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm’s production function is: X=-0.2L3 + 18L2 + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A t what weekly output is marginal cost equal to average variable cost? if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm’s production function is: X=-0.2L3 + 18L2 + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A t what weekly output is marginal cost equal to average variable cost? if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
Related questions
Question
A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm’s production function is:
X=-0.2L3 + 18L2 + 1620L.
Where X is the number of units of the product per week, and L is the number of persons employed.
- A t what weekly output is marginal cost equal to average variable cost?
- if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning