Given the labor demand function(9)-/+cq where I(9) is labor demanded, is the fixed cost of production and cis the constant marginal cost. Assumewegwf,• Derive p by maximizing profit.. If you are given that we are following Dixit Stiglitz's demand system how would you comment upon the economy of scope and the vanety produced?

(A). The profits of the labor market will be maximized only by calculating derivatives of the given…

Answered: Given the labor demand function (9)-/cq…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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What shapes would you generally expect a total product curve and a marginal product curve to have?
A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
Suppose that labor is the only input used by aperfectly competitive firm. The firm’s productionfunction is as follows:Days of Labor Units of Output0 days 0 units1 72 133 194 255 286 297 29a. Calculate the marginal product of each additionalworker.b. Each unit of output sells for $10. Calculate thevalue of the marginal product of each worker.c. Compute the demand schedule showing thenumber of workers hired for all wages from zeroto $100 a day.d. Graph the firm’s labor-demand curve.e. What happens to this demand curve if the price ofoutput rises from $10 to $12 per unit?
suppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.
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The marginal product of effort, a typical worker in fast-food burger joint, is one- fourth burgers per hour; that is, MPe = .25The price of a burger is $2. The figure graphs Mac’s marginal cost of effort. If Mac increases his effort by one unit per hour, the change in the burger joint’s revenue is $ per hour. That is, what is VMPe , the value of Mac ‘s marginal product of effort ? Plot the VMPe curve in the figure. Mac efficient effort e^ is the solution to what equation? Illustrate the solution in the figure. Mac efficient…
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The nation of Ectcnia has 2.0 competitive apple or--chards, all of which sell apples at the world price of$2 per apple. 11,c following equations describe theproduction function and the marginal product of laborin each orchard:Q =IOOL - L2Ml'L = 100 - U,where Q is the number of apples produced in a day,Lis the number of workers, and MPL is the marginalproduct of labcr.a. What is each orchard's labor demand as a functionof the daily wage W? What is the mar ket's labordemand?b. &:tenia has 200 workers who supply their labcrinelastically. Solve for the '""gc W. How manyworkers docs each orchard hire? How much profitdocs each orchard owner make?c. Calculate what happens to the inoome of workersand orchard owners if the world price do ubles lo$4 per a pple.d. Now suppose the price is back a l $2 per apple,but a hurricane d estroys hall the orchards. Calcu•late how the hurricane affects the income of eachworker and of each remaining orchard owner.Wl,at happens to the income of Ectcnia as…
11:16 Fri 10O Dec * 9 80% ... managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 22 of 46 AP Microeconomics Page 21 of 46 AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 2 43 3 66 4 88 108 6. 126 7 141 8. 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires…
A small speciality cookie company, whose only variable input is labor, finds that the average worker can produce 25 cookies per day, the cost of the average worker is $128 per day, an the price of a cookie $0.50. Is the firm maximizing profit? Choose the answer. It is not maximizing profit because... a. the price of the output is not equal to the wage b. the marginal product of labor is less than the wage c. the marginal revenue product of labor is greater than the wage d. the marginal revenue product of labor is less than the wage
Q63

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