Suppose that a firm's production function is given by:150-Q = 14L-12140-130-120-110-100-for L=0 to 7, where L is labor input per day and Q is output per day. Derive and drawthe firm's demand for labor if the firm's output sells for $10 in a competitive market.The marginal product of labor (MP, ) is 14 - 2L.Using the line drawing tool, draw the firm's labor demand curve. Label this curve D, .70Carefully follow the instructions above, and only draw the required objects.50-30-20-10-10Quantity of labor (hours)Price of labor

A firm's demand curve (dd) for labor can be derived by multiplying the MPL (marginal product of…

Answered: Suppose that a firm's production…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm has the production function Q(L, K) = √K + 2√L. The price of one unit of capital is R > 0, and the price of one unit of labor is W > 0. Which of the following statements is correct? The production function can be represented by a CES production function [aLº +6K²] for suitable values of b and p. a₂ The marginal rate of technical substitution is MRT Sık (L, K): 2√L √K O If W = R, the fi rm's demand for labor is four times the demand for capital. O The production function has increasing returns to scale.
The Southern Mail produces local newspapers. The company can rent its equipment and hire workers at competitive rates. Equipment needed for this operation can be rented at R1 per hour, and labour can be hired at R2 per worker hour. The production function using available technology can be expressed as Q = 2L05 +3K0.5. The marginal product of labour is given as 1 20.5 and the marginal product of capital is expressed as 3 2K0.5 a. Determine the firm's optimal ratio of labour to capital. b. Determine the level of capital and labour in the long run if the firm wants to apply a cost constraint of R396. Calculate the output of the firm. Choose a file to upload (Maximum file size: 20MBI
Suppose that the production function of the firm is: Q = 100L1/2.K1/2 K= 100, P = $1, w =$50. and r = $40. Determine the quantity of labor that the firm should hire in order to maximize the profits. What is the maximum profit of this firm?
Show full answers and steps to part d) e) & f)
Let the production function of a firm is given as q=(x0.5 +y0.5)2 Where x and y are inputs and wx is the price of input x and wy is the price of input y. a) Assume the firm has a limited budget to spend on buying input. Find the cost-conditional input demand function for each input. b) Now, assume the firm has no budget restriction but it has a production quota. Find the output-conditional input demand function for each input. c) Find the cost function of the firm. d) Assume the firm has no budgetary or production restrictions and set up the profit maximization problem. e) Write the conditions that need to be met to find a non-zero output that maximizes profits.
The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: Q=100 L-L2 MPL = 100-2L Where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor a. What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand? b.Ectenia has 200 workers who suply their labor inelastically. Solve for the wage W How many workers does each orchard hire ? How much profit does each orchard owner make? c.Calculate what happens to the income of workers and orchard owners if the world price doubles to $4per apple. d. Now suppose the price is back at $2 per apple, but a hurricane destroys half the orchards. Calculate how the hurricane affects the income of each worker and of each remaining orchard owner. What happens to the income of Ectenia as a…
4.
Suppose that a firm's estimated production is: Q = K³/411/4 What is the marginal rate of technical substitution (MRTS) equal to?
Tom Petersen is considering renovating bar stools at Dreamland. The productionfunction for new bar stools is given byq= 0.5L0.5where q is the number of stools produced during the renovation week and l represents thea number of worker hours employed during the period. The firm is a price taker for both bar stools(which sell for P) and workers (which can be hired at a wage rate of w per hour).a. What is the cost function for this firm C(w,q)?b. What is the supply function for bar stools q(P,w)?c. What is the profit function for this firm (P,w)?d. What is the firm’s demand function for labor function L(P,w)?
Please explain what numbers are being plugged in to get the answer.
Maximizing profit with isoprofit curvesSuppose that you are starting up a lawn-raking business. All of your workers are required to supply their own rakes, so the only cost to you is hiring labor at an hourly rate. Suppose that the market price of raking someone's yard is $24 per lawn and the hourly wage is $18 per hour. The following graph shows the production function (PF) for your business.

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