Sunnyland Corporation has the following weekly revenue function Re) = 5400 + 144 Je with weekly production costs of $1,200. Its manager's disutility of effort is given by u(e) = 680 + 8e. Note that R = firm revenue and e = manager hours per week. Assume that effort is observed perfectly and the manager provides optimum amount of effort. How much effort will the manager provide each week? %3D %3D %3D 64 hours 25 hours 36 hours 81 hours 49 hours
Sunnyland Corporation has the following weekly revenue function Re) = 5400 + 144 Je with weekly production costs of $1,200. Its manager's disutility of effort is given by u(e) = 680 + 8e. Note that R = firm revenue and e = manager hours per week. Assume that effort is observed perfectly and the manager provides optimum amount of effort. How much effort will the manager provide each week? %3D %3D %3D 64 hours 25 hours 36 hours 81 hours 49 hours
Chapter1: Making Economics Decisions
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Transcribed Image Text:Question 21
Sunnyland Corporation has the following weekly revenue function R(e) = 5400+144e
with weekly production costs of $1,200. Its manager's disutility of effort is given by
u(e) = 680 + 8e. Note that R = firm revenue and e = manager hours per week.
Assume that effort is observed perfectly and the manager provides optimum amount
of effort. How much effort will the manager provide each week?
%3D
!!
64 hours
25 hours
36 hours
81 hours
49 hours
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