### Firm Production and Break-Even Analysis#### Production Function and Unconditional Demand for Labor**Question:**If a price-taking firm's production function depends only on labor $ L $ and is given by $ q = 2L^{1/2} $, then the unconditional demand for $ L $ is given by:- a. $ L = \frac{q}{w} $- b. $ L = q^2 $- c. $ L = \left(\frac{w}{p}\right)^2 $- d. $ L = \left(\frac{p}{w}\right)^2 $ (Correct Answer)**Explanation:**The correct option, **d. $ L = \left(\frac{p}{w}\right)^2 $**, is derived based on the given production function. Economic theory and principles are applied to derive the unconditional demand for labor $ L $.---#### Cost Function and Break-Even Analysis**Question:**Consider a price-taking firm with cost function $ C(q) = 16 + q^2 $. What is the break-even price below which the firm will exit the market in the long run?- a. 2- b. 4- c. 8- d. 16 (Correct Answer)**Explanation:**The correct option, **d. 16**, indicates the break-even price for the firm. At this price, the firm covers all its costs, including fixed and variable costs. Below this price, the firm cannot sustain operations and will exit the market in the long run.

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If a price-taking firm's production function depends only on labor L and is given by q = 2L2, then the unconditional demand for L is given by O a. L= qlw O b. L = q? O c. L=( O d. L= ( Clear my choice

If a price-taking firm's production function depends only on labor L and is given by q = 2L2, then the unconditional demand for L is given by O a. L= qlw O b. L = q? O c. L=( O d. L= ( Clear my choice

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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