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Reid's Reeds produces reeds for musical instruments. Reeds are sold for $10 each. The business requires...

Reid's Reeds produces reeds for musical instruments. Reeds are sold for $10 each. The business requires skilled craftspeople that it must pay $40 an hour. Each reed producing machine costs $95 an hour to operate. Reed production is given by f(L,K) = 16L^(3/4)K^(1/4) so that the marginal product of labor is MPL = 12(K/L)^1/4 . The capital stock is fixed at 16 machines per hour. How much labor should the firm employ in the short run? How many reeds does the firm produce? What is the firm's level of profits?

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