Q =min{ 98 L , 126 K} where Q is the output of lampposts. The prices...
Q =min{ 98 L , 126 K}
where Q is the output of lampposts.
The prices of labor (PL), capital (PK), lamppost (P) and the cost (C) are the following:
PL=11, PK=5, P=11 and
C=5,137
What is the profit maximizing amount of labor that Meyer Inc should
hire?
Homework Answers
PL=11, PK=5, P=11 and C=5,137
Cost function: C = L * PL + K * PK
=> 5137 = 11L + 5K
--------
Q =min{ 98 L , 126 K}
K and L are complementary inputs.
At profit maximizing point in this case; Q = 98L = 126K
=> 98L = 126K
=> K = (98L / 126) ----------- (1)
Put (1) in cost function.
=> 5137 = 11L + 5K
=> 5137 = 11L + 5 (98L / 126)
=> (5137 * 196) = (11L * 126) + 490L
=> 1006852 = 1386L + 490L
=> 1006852 = 1876L
=> L = (1006852 / 1876)
=> L = 536.70
Profit maximizing amount of labor that firm should hire is 536.70
Add Answer to:
Q =min{ 98 L , 126 K}
where Q is the output of lampposts.
The prices...
The production function of the Auto parts firm is given by Q-5L-L, where Q is the...
The production function of the Auto parts firm is given by Q-5L-L, where Q is the units of output and L is the number of labor hours. Each output sells for 100 dollars per unit. The human resources manager estimates that the marginal cost of hiring an extra worker is 50 dollars. How many labor hours should this firm hire? Hint: MPL=5-2 L 1) 2) A frim's production function is given by Q(L)-6L, where Q measures output and L is...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):=...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):= L1/2K1/3. The price of the output is $3, and the input factors are priced at pL 1 and pK-6 (a) Find the cost function (as a function of output Q). Then find the optimal amount of inputs i.e., L and K) to maximize the profit (b) Suppose w changes. F'ind the conditional labor deand funtionL.Px G) whene function L(PL.PK for Q is...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):=...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):= L1/2K1/3. The price of the output is $3, and the input factors are priced at pL 1 and pK-6 (a) Find the cost function (as a function of output Q). Then find the optimal amount of inputs i.e., L and K) to maximize the profit (b) Suppose w changes. F'ind the conditional labor deand funtionL.Px G) whene function L(PL.PK for Q is...
A firm produces output Q by using capital K and labor L in fixed proportions, i.e....
A firm produces output Q by using capital K and labor L in fixed proportions, i.e. Q = F (K ,L ) = min {K, L/3}. The price of a unit of labor is w = 6, the price of a unit of capital is r = 2 and the price of output is p = 20. a) Draw the isoquant for Q = 8. b) Find the marginal product of labor. Suppose that (in part c and d) the...
9. Suppose the firm's production function is given by f(K,L) min (K",L" (a) For what values...
9. Suppose the firm's production function is given by f(K,L) min (K",L" (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at R = 10,000 and a =. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K, L) = KLi. Let...
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L?...
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L? Assume K = 25. a. Fill in the following table. (First, find the total output from the production function, then find the marginal product by dividing the change in total output by change in labor.) Capital MPL Labor 7 Total Output 126 APL 18 25 12 25 25 25 25 25 10 11 12 13 14 15 25 25 25 b. How many units...
5. Consider a firm with the production function F(K,L) = (K^3/5)(L^1/5) (a) Setup and solve the...
5. Consider a firm with the production function F(K,L) = (K^3/5)(L^1/5) (a) Setup and solve the long run cost minimization problem for the long run optimal amount of capital K*(w,r,q) and labor L*(w,r,q), and the long run minimized cost C* (w,r,q). (Hint: reduce the cost function for the next part. (b) Setup and solve the profit maximization problem over quantity using the cost function you solved for in the previous part. Solve for the profit maximizing quantity q *(p,w,r), cost...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm e...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
A firm has a production function of Q=20K^.2*L^.8 where Q measures output, K represents machine hours,...
A firm has a production function of Q=20K^.2*L^.8 where Q measures output, K represents machine hours, and L measures labor hours. If the rental cost of capital (r) equals $15 the wage rate (w) equals $10, and the firm wants to produce 40,000 units of output, how much labor and capital should the firm use?
1a) Consider an economy where output is produced using just labor as input. Output is sold...
1a) Consider an economy where output is produced using just labor as input. Output is sold at $10 per unit and the marginal product of labor for each worker hired is expressed as MPL=10-2L. If each worker is paid $40, what would be the total profit of the profit-maximizing entrepreneur? a. $40 b. $60 c. $0 1b) Consider an economy where output is produced using just labor as input. Output is sold at $10 per unit and the marginal product...
The production function of the Auto parts firm is given by Q-5L-L, where Q is the units of output and L is the number of labor hours. Each output sells for 100 dollars per unit. The human resources manager estimates that the marginal cost of hiring an extra worker is 50 dollars. How many labor hours should this firm hire? Hint: MPL=5-2 L 1) 2) A frim's production function is given by Q(L)-6L, where Q measures output and L is...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):= L1/2K1/3. The price of the output is $3, and the input factors are priced at pL 1 and pK-6 (a) Find the cost function (as a function of output Q). Then find the optimal amount of inputs i.e., L and K) to maximize the profit (b) Suppose w changes. F'ind the conditional labor deand funtionL.Px G) whene function L(PL.PK for Q is...
Conditional/Unconditional demand for an input factor A firm produces an output using production function Q = F(L, K):= L1/2K1/3. The price of the output is $3, and the input factors are priced at pL 1 and pK-6 (a) Find the cost function (as a function of output Q). Then find the optimal amount of inputs i.e., L and K) to maximize the profit (b) Suppose w changes. F'ind the conditional labor deand funtionL.Px G) whene function L(PL.PK for Q is...
9. Suppose the firm's production function is given by f(K,L) min (K",L" (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at R = 10,000 and a =. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K, L) = KLi. Let...
1. Imagine a firm has the following short-run production function: q=f(L,K) = K L – L? Assume K = 25. a. Fill in the following table. (First, find the total output from the production function, then find the marginal product by dividing the change in total output by change in labor.) Capital MPL Labor 7 Total Output 126 APL 18 25 12 25 25 25 25 25 10 11 12 13 14 15 25 25 25 b. How many units...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
Most questions answered within 3 hours.
-
What is meant by a “term premium”?
What can explain such a premium? Is it a...
asked 44 seconds ago -
23. Which molecule has only covalent bonds? A. CO2 B. Al2O3 C.
Mg3N2
24. The octet...
asked 26 minutes ago -
the
total pressure for a mixture of N2O4 and NO2 is 2.20 atm. If Kp=
7.10...
asked 28 minutes ago -
Delaware Corp. prepared a master budget that included $22,385
for direct materials, $28,600 for direct labor,...
asked 25 minutes ago -
For pesticide HCB (hexachlorobenzene), its logarithmic partition
coefficient log Kow is 5.6. What would be the...
asked 28 minutes ago -
A chemist requires 0.422 mil Na2CO3 for a reaction. How many
grams does this correspond to?
asked 32 minutes ago -
If the vapor pressure of carvone is approximately 9.4 torr at 99
°C, approximately how much...
asked 51 minutes ago -
A juice bottling company is carrying out a test at 10%
significance that the mean population...
asked 1 hour ago -
What is the reflectivity (in percent) needed to keep water at a
temperature near its freezing...
asked 1 hour ago -
Suppose that the average surface temperature of Earth is 300K.
Assume this is uniform over its...
asked 1 hour ago -
Draw the condensed structural formula for alkenes and alkynes or
the line-angle structural formula for cycloalkenes...
asked 1 hour ago -
M. Laing has suggested a new arrangement of the periodic table
(J.Chem.Ed.1989, 66,
746). Answer the following...
asked 1 hour ago