Assume that the production function for competitive firm is given by F(L)=9L1/3, where L is the number of units of labour used in the production process. Suppose that the cost per unit of labor is $3 and the price of output is $9 per unit, how many units of labor will the firm hire?
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Assume that the production function for competitive firm is given by F(L)=9L1/3, where L is the number of units of labour used in the production process. Suppose that the cost per unit of labor is $3 and the price of output is $9 per unit, how many units of labor will the firm hire?
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- Suppose a short-run production function is described as Q=30L-0.05L^2 where L is the number of Labors used each hour. If each unit of output (Q) has a marginal revenue (price) of $5 and the marginal cost of labor is $40 per labor unit (L), how many units of labor (L) should be hired to maximize profit?Suppose that the production function for a phone is ? = 20K^0.5L ^0.5 . The marginal product of labor is 10(k/l)^0.5 , and the marginal product of capital is 10(L/K) ^0.5 . Suppose that labor can be hired for $6 and capital can be hired for $9. a. When the firm is producing 49 units at lowest cost, what will the firm’s marginal rate of technical substitution be? b. Solve for the lowest-cost combination of labor and capital that will allow the firm to produce 49 phones. Fractional units of labor and capital are allowed. c. What is the minimum cost of producing 49 phones?Suppose that a firm has the following production function: q = 2L + K. The wage for a $10 per hour and the rental rate of capital is r = worker is w $10 per hour. In the short run the firm amount of capital is fixed at K = 20 units. If the firm's goal is to minimize their cost of producing 100 units, then in the short run they will hire units of labor and in the long run they will hire units of labor. (Round answers to two decimals if necessary.)
- The production function for a product is given by q= 10K^(1/2)L^(1/2) where K is capital, and L is labor and q is output d) Now suppose w =30 and r = 120. What is the minimum cost of producing q=1000. (You must show your work by clearly writing the equations that you use to derive the cost minimizing levels of L and K.) e) Now suppose that the firm is in the short run and cannot vary the amount of capital. That is, it must use the same amount of capital as in part d). However, the firm wants to produce 1200 units of output. How much labor should it use to minimize its cost and what is the minimum cost of producing q =1200?Suppose that a firm’s production function is Q = 2L0.5 + 3K0.5. The cost of a unit of labour is R2 and the cost of a unit of capital is R1.a) Determine the firm's optimal ratio of labour to capital. b) Determine the level of capital and labour in the long run if the firm wants to apply a cost constraint of 396. Calculate the output of the firm. c) Graphically illustrate this using isoquant and isocost lines.a) A firm operates according to the following production function: q(K,L)=100 KS LOS. The price of capital is r=$15/unit and the price of labor is w=$60 per unit. The firm currently operates with KSR-100 units of capital and wants to produce qs 4000 units of output. How much labor does the firm need to hire and what is the total cost of producing the 4000 units?
- Consider a production function of two inputs, labor and capital given by Q=LK. Let w =5 and r = 1, where w is the price per unit of labor and r is the price per unit of capital. a) Suppose that the firm is required to produce Q units of output. Show how the cost-minimizing quantity of labor depends on the quantity Q? b) If the firm is operating in the short run, with K fixed at 10 units, calculate the short-run total cost of producing 100 units of output?Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour). The marginal product of labor and marginal product of capital are 30 and 15, respectively. Is the firm minimizing the cost of producing 2,475 units of output? Explain.A short run production function of a competitive firm is given by Y=6L^(2/3) where Y represents the units of output while L is the labour required. If P = 3 and W = 6. How many units of L will the firm hire?
- Suppose that a firm’s production function is described by Q = 60L – L2 where Q measures units of output and L is the number of labour hours. Suppose that output sells for $2 per unit and the cost of labour is MCL = $16 per hour.a) How many hours of labour should the firm hire?b) How much output should it produce?c) How much profit would the firm get if choosing optimally?Suppose the production function for a competitive firm is y=f(x1,x2)= x1 1/4 x2 1/4 . The cost per unit of the first input is w1 and the cost of the second input is w2. A: What are the returns to scale of this production function? B: Find the cheapest input bundle, x1 and x2, that yields the given output level of y. C: Write down the formula of the firm’s total costs as a function of y. D: Are the average costs increasing, constant or decreasing in y? Are the marginal costs increasing, constant or decreasing in y?1/2 Consider a firm with the production function ƒ(x₁, x₂) = x¹/²x₂. The price of the two inputs is ₁ = 2 and w₂ = 1. If x₁ = x₂ = 16, the marginal product of input 1 is When ₁ is increasing and 2 stays the same, the marginal product of input 1 is Constant Decreasing Increasing This production function has Constant returns to scale Decreasing returns to scale O Increasing returns to scale None of the other answers is correct Does the production function have a diminishing technical rate of substitution? No Yes
