A firm produces output via the function: Q = L - (L2/800), where Q is the output per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $30 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $50. How much labor should the firm employ?
A firm produces output via the function: Q = L - (L2/800), where Q is the output per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $30 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $50. How much labor should the firm employ?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 6MC
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A firm produces output via the function: Q = L - (L2/800), where Q is the output per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $30 per hour (wage plus
How much labor should the firm employ?
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