1. Suppose a short-run production function is described as Q40L 0.04L2 where L is the number oflabors used each hour. a.Derive the equation for Marginal Product of labor (MPL):b.Determine the amount of labor (L) at which total output is maximized (Qmax).C.If each unit of output (Q) has a marginal revenue (price) of $5 and the marginal cost oflabor (MCL) is $28 per L, what is the optimal amount of labor (L) or this firm to employ?

Marginal Product of Labor(MPL): refers to the change in output (quantity produced) resulting from…

Answered: 1. Suppose a short-run production…

1. Suppose a short-run production function is described as Q = 40L 0.04L2 where L is the number of labors used each hour.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 2SQP

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Concept explainers

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.

Question

1. Suppose a short-run production function is described as Q40L 0.04L2 where L is the number of
labors used each hour.

a.
Derive the equation for Marginal Product of labor (MPL):
b.
Determine the amount of labor (L) at which total output is maximized (Qmax).
C.
If each unit of output (Q) has a marginal revenue (price) of $5 and the marginal cost of
labor (MCL) is $28 per L, what is the optimal amount of labor (L) or this firm to employ?

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