Macmillan LearnA manager of a perfectly competitive firm observes that the marginal product of labor is 5 units per hour, the marginal produof capital is 40 units per machine, the wage is $20 per hour, the rental price of capital is $120 per machine, and the price ofoutput is $5 per unit. Please complete the following statement.To maximize profit, the manager should hirelabor and rentcapital.

Step 1: Calculate Marginal Product per DollarTo determine the efficiency of each input, we need to…

Answered: Macmillan Learn A manager of a…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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Plz give answer ASAP. A price taking firm has the production function, q = f(l) = √ l where q is the output and l is the labor input. The price of labor input or wage is equal to $ 5, the output price is given by p, and the fixed cost is $80. a. Find the prices at which the firm makes a positive profit, and graph the prices along the curve, Hint find the profit function (SOLVE) b. Find the firm’s supply curve. (chek if correct) Q^2 = L TC or C(q) = wl = wq^2 The level of output wich firm maximizes profit is firms supply function We know profit function = pq – wq^2 dπ/dq = p – 2wq =0 p=2wq q(p,w) = p/2w thus supply function q=p/2w c. When p=10, since the firm makes a negative profit, it is better not to produce. True or False? Explain Hint part (a) we found positive values use (a) to demonstrate (SOLVE)
You are given the following table by one of your analysts. Provide the profit maximizing point and explain how you would determine how much labor you will need to maximize profits.
Suppose that labor is the only input used by a perfectly competitive firm.The firm's production function is as follows:a.Calculate the marginal product for each additional worker.b.Each unit of output sells for $10.Calculate the marginal product for each additional worker.cCompute the demand for schedule showing the number of workers hired.
Suppose that a farm manager seeks to maximize its total profit function a s given by the equation, profit =80x-2x^2-xy-3y^2+100y. let x=cabbages and y= onions. but the manager faces a constrain that the sum of the cabbages and onions must be equal to 12.a. Calculate the level of output at which the farm maximizes profitb. Calculate the farms profit.
The local ice cream shop is trying to figure out how many workers to hire, and part of the decision will be based on the marginal product of labor. The following table shows a short-run production function for quantity of ice cream tubs produced. Diminishing marginal returns begins after hiring which worker? Workers hired Quantity of ice cream tubs produced 1 110 2 200 3 270 4 300 5 320 16 330 300 Seventh Sixth Second Fourth
Amanda owns a small bakery in the perfectly competitive pastry industry. She is considering whether to hire an additional pastry chef. The wage rate for pastry chefs is $1,000 per week; the marginal product of an additional pastry chef is 1,000 pastries per week; and the unit price of pastries is $1.25. Amanda should: O hire the additional pastry chef. not hire the additional pastry chef. raise the price of the pastries. O Not enough information is given to answer the question.
The following table shows the relationship between the number of trainers working at the new gym (SD Fitness) and the number of clients they can train per week. These clients represent the output of the firm. Clients pay $60 per hour. Find the Marginal Product (MPL) for the 4th, 5th and 6th trainer. Find the Value of Marginal Product (VMPL) of the 4th, 5th and 6th trainer. SD Fitness’s trainers are paid $650 per week. How many trainers will the gym hire? How do you know?
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…
What is the profit maximizing level of output and how much daily profit will the producer below earn if the price of pizza is $0.50 per slice? See the attachment for graph.
Coldbox Corporation hires its workers in a perfectly competitive labor market and produces and sells frozen peas in a perfectly competitive product market. The market price for frozen peas is $4 per bag. The table below shows Coldbox' short-run production of frozen peas. Labor is the only variable input. Coldbox Corporation's fixed cost is $500. Number of Workers Bags of frozen peas 0 0 1 60 2 140 3 250 4 320 5 380 6 400 a) If the wage is $200 per worker, identify the profit-maximizing number of workers for Coldbox. Explain using marginal analysis. b) If the price of frozen peas decreases by $2 per bag, would the number of workers hired by Coldbox be more than, less than, or equal to the number of workers you identified in part (a) ? Explain. c) Suppose that Coldbox hires workers from a monopsonistic labor market. Would the wage be higher, lower, or equal to the equilibrium wage in a perfectly competitive market? Explain.
10. The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of output is $3 and there are no fixed costs, what is the profit-maximizing level of output?
Suppose a firm is maximizing profits in the short run with variable factor L and fixed factor K. Ifthe price of L decreases, what happens to the firm’s use of the two variable factors? explainbriefly using both mathematics and an isoprofit graph.

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