Suppose the hourly wage is $25, the price of each unit of capital is $50, and the price of output is $100 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is Q(E,K) = VE × K. 2. a. If the current capital stock is fixed at 100 units, what is the Marginal Product of Labor? b. How many hours of labor should the firm hire in the short run?
Suppose the hourly wage is $25, the price of each unit of capital is $50, and the price of output is $100 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is Q(E,K) = VE × K. 2. a. If the current capital stock is fixed at 100 units, what is the Marginal Product of Labor? b. How many hours of labor should the firm hire in the short run?
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.9P
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Help me please
![2.
Suppose the hourly wage is $25, the price of each unit of capital is
$50, and the price of output is $100 per unit. Assume that the firm cannot affect
any of these prices. The production function of the firm is Q(E, K) = VE × K.
If the current capital stock is fixed at 100 units, what is the Marginal
Product of Labor?
а.
b. How many hours of labor should the firm hire in the short run?
c. Set
the profit function. How much profit will the firm earn if the rental
dn
costs of capital are $20
per
unit?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc2c132b9-58ed-4951-9731-e1ccff232bb3%2F009765b9-1768-4ced-b2c7-7b8af039adc1%2Fsl3mf4l_processed.png&w=3840&q=75)
Transcribed Image Text:2.
Suppose the hourly wage is $25, the price of each unit of capital is
$50, and the price of output is $100 per unit. Assume that the firm cannot affect
any of these prices. The production function of the firm is Q(E, K) = VE × K.
If the current capital stock is fixed at 100 units, what is the Marginal
Product of Labor?
а.
b. How many hours of labor should the firm hire in the short run?
c. Set
the profit function. How much profit will the firm earn if the rental
dn
costs of capital are $20
per
unit?
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