Assume that a noncompetitive firm's short run production function relates the level of output to labor input with the capital input fixed at K* Q=f(L,K* )= 40L - 2Ľ² for L<20 This firm faces the following demand function for its product 8500 - 350 P - The firm pays a wage of $70 per unit and has $5000 of fixed cost. a) What is the firm's profit maximizing level of output, price, and employment? b) What is the firm's profit or loss?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Assume that a noncompetitive firm's short run production function relates the level of output to
labor input with the capital input fixed at K*
Q=f(L,K* )= 40L - 21²
for L < 20
This firm faces the following demand function for its product
P = 8500 - 35Q
The firm pays a wage of $70 per unit and has $5000 of fixed cost.
a) What is the firm's profit maximizing level of output, price, and employment?
b) What is the firm's profit or loss?
Transcribed Image Text:Assume that a noncompetitive firm's short run production function relates the level of output to labor input with the capital input fixed at K* Q=f(L,K* )= 40L - 21² for L < 20 This firm faces the following demand function for its product P = 8500 - 35Q The firm pays a wage of $70 per unit and has $5000 of fixed cost. a) What is the firm's profit maximizing level of output, price, and employment? b) What is the firm's profit or loss?
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