digital kitchen location with a production function of q= (L^0.3 )(K^0.5), where q is the number of chicken meals it sells, L is employee hours, and K is robot hours. Chicken sells for a price p. Employees and robots are paid w and r per hour, respectively. In the short run, Los Pollos Hermanos uses 25 robots. (a) define diminishing marginal returns to labor. (b) Does Los Pollos Hermanos experience diminishing marginal returns to labor? If so, at what number of employee hours does it occur? (c) Calculate Los Pollos Hermanos's short-run demand for labor (i.e., its short-run unconditional demand function for labor).
digital kitchen location with a production function of q= (L^0.3 )(K^0.5), where q is the number of chicken meals it sells, L is employee hours, and K is robot hours. Chicken sells for a price p. Employees and robots are paid w and r per hour, respectively. In the short run, Los Pollos Hermanos uses 25 robots. (a) define diminishing marginal returns to labor. (b) Does Los Pollos Hermanos experience diminishing marginal returns to labor? If so, at what number of employee hours does it occur? (c) Calculate Los Pollos Hermanos's short-run demand for labor (i.e., its short-run unconditional demand function for labor).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose the fast food chicken industry is perfectly
competitive. One firm, Los Pollos Hermanos, opened a
digital kitchen location with a production function of
q (L^0.3 )(K^0.5), where q is the number of chicken
meals it sells, L is employee hours, and K is robot hours.
Chicken sells for a price p. Employees and robots are
paid w and r per hour, respectively. In the short run, Los
Pollos Hermanos uses 25 robots.
(a) define diminishing marginal returns to labor.
(b) Does Los Pollos Hermanos experience diminishing
marginal returns to labor?
If so, at what number of employee hours does it occur?
(c) Calculate Los Pollos Hermanos's short-run demand for
labor (i.e., its short-run unconditional demand function
for labor).
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