A firm operates in a perfectly competitive output market and aperfectly competitive input market.The production function for the firm is:f(N, K) = 4N KIn the short-run the level of capital is fixed at 27. If the price ofoutput is 12, and wage rate is $10$, how many workers shouldthe firm hire?Draw a diagram of your solution.

f(N,K) = 4N1/2 K1/3 Differentiate f(N,K) w.r.t N to get MPN => MPN = df(N,K) / dN => MPN = 4…

Answered: A firm operates in a perfectly…

A firm operates in a perfectly competitive output market and a perfectly competitive input market. The production function for the firm is: f(N, K) = 4N K

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: The manager of Don Teeta Company Limited hires labour (L) and rents capital equipment (K) in a very…

A: The wage rate of labor (w) = GH¢2 per hour Capital is rented (r) = GH¢5 per hour, The unit price of…

Q: the returns to scale for the following production functions: q = K.34L.34 q = KLM

A: DISCLAIMER “Since you have asked multiple question, we will solve the first 3 question for you. If…

Q: A firm has the production function q = f(L, K) = min{L2, K2}. This firm has: increasing returns to…

A: The question is what magnitude that production function returns to the firm under consideration. The…

Q: Consider the following production function: Q=KªLB a) Derive the cost function b) Draw the AC and MC…

A: * ANSWER :- * A) at eqm, MRTS = w/r MRTS = MPL / MPK

Q: For the production functions of (1) and (2) create the isoquants for q = 100, and for q = 144 with K…

A: Isoquant curve represents the influence of all inputs on the level of output.

Q: If the production function is f (x₁, x2) = min{x1, x2}, then the cost function is c(W1, W2, y) =…

A: A production function depicts how inputs like labor and capital influence a firm's ability to…

Q: (5) Consider the Cobb-Douglas production function f(x1, x2) = Axqx½. (a) For what valucs of a and b…

A: ANS When the rise in the amount of output(o/p) is more than the rise in the amount of input (i/p)…

Q: f(x1, 12) = (x1 - 1)0.25x9-5.

A: We are going to use the relationship between upward sloping marginal cost curve and supply curve to…

Q: A firm has the production function q = f(L, K) = L0.5+ K0.5 This firm has: O increasing returns to…

A: The production function exhibits increasing returns to scale if the increase in input by 'm' times…

Q: A Cobb-Douglas production function for new company is given by ?(?, ?) = ?³/⁵ ?²/⁵ where K…

Q: Find out the maximum possible output for a firm with zero unit of L and 10 units of K when its…

Q: The production function is given by F(L) = 622/3. Suppose that the cost per unit of labor is $8 and…

A: A mathematical equation that describes the relationship between inputs (such as labor, capital, and…

Q: As a production process requires labor L and capital K, q = F (L, K). The wage for a labor is $500,…

A: The optimal level of labor and capital is given by the point where the marginal rate of technical…

Q: (b) What is the firm's marginal cost when it is producing y units of output?

A: a) Conditional Input Demand and Cost Function1. Conditional Input Demand:To find the conditional…

Q: Now suppose that the firm's capital input is fixed at K = K 12. Solve the firm's short-run cost…

A: Given perfect complement production function

Q: A firm has a production function QL,K=100L0.4K0.6 with a cost function CL,K=5L+30K. What is the…

A: Q(L,K)=100L0.4K0.6 C(L,K)=5L+30K w=5 r=30 Q=1000 MPL=dQ/dL=0.4(100)L-0.6K0.6 MPL=40L-0.6K0.6…

Q: Firm "Happy Capitalist" has following production function: f(K, L) = 2*k0.2L0.8. Furthermore, it is…

A: Production function is given byCapitalist wants to maintain output level of 250. Hence rewrite the…

Q: The manager of Don Teeta Company Limited hires labour (L) and rents capital equipment (K) in a very…

A: Given wage rate of labor (w) = 2 capital rent (r) = 5 Price of Product (P) = 0.75 Total Cost (TC) =…

Q: (4) w = 3. firm's production function is F(K, L) = 2√/K + L. Factor prices are r = 2 and (a) Find an…

A: The marginal product of labor represents the increase in output as a result of an increase in labor…

Q: A firm produces output according to the following production function: Q = F (K, L) = 4K + 8L (a)…

A: The physical output of a production process and the physical inputs or elements of production…

Q: 1. 1 Example 1: Let y = F(l, k) = l¾k₹ be the production function, p = 30, w = 10, and r = 5. Find…

A: This problem could be solved by lagrangian function. The lagrangian function is a mixture of…

Q: A firm has a production function f(x, y) = 1.80(x0.10 + y0.10)2 whenever x > 0 and y > 0. When…

A: The objective of the question is to determine the returns to scale of the firm's production…

Q: Consider a firm with production function Q(L, K) = min (2L, K). The wage rate is w = 6, and the…

A: The production function is a function that depicts the relationship between inputs and outputs in…

Q: Consider a market with Qd= 50 - P and Q = 4P What is the consumer surplus in this market? 500 800…

A: SummaryFor the consumer surplus:The answer is 800.For the labor-capital combination:The answer is…

Q: A) A firm would like to produce 5 units of bread (B) and 4 units of strawberry jam (J) per week…

A: Economies of scope is a decline in average cost of production when the firm produces an increasing…

Q: Given the production function of F(K,L) = sqrtKL If the short run has a fixed K of 5 units, which…

A: Here the production function of F(K,L)=KL the short run fixed capital k=5 units so, F(K,L)=KL=5L…

Q: the wage rate of labour is GH¢2 per hour and capital is rented at GH¢5 per hour. Also, the unit…

A: Production function : Q = 14K0.5 L0.5 + 10 Profit maximizing utilization of any input is the till…

Q: A firm faces the production function: q=10L^0.32 K^0.56 (a) What kind of returns to scale does…

Q: When the quantity of a variable input is increased from 4 to 6 units, the total output increases…

Q: Find the MRTS for a firm with production function f(L,K)=(L)^2+vK. Is it diminishing?

A: A production function gives the technological relation between quantities of physical inputs and…

Q: A farm producing wheat has the following production function q = 100(K0.8L0.2). Does the above…

A: refers to how much output changes given a proportional change in all the inputs i..e where all…

Q: A firm's production is given by f (L, K) = min(3L, 2K), and it faces input prices w = $30/hr and r =

A: Given; Production function; f(L,K)=16min(3L,2K) Price of labor; w=$30 per hours Price of capital; r=…

Q: Consider a production function Q = (K.5 + L.5) 2 Does this production function exhibit…

A: Q=(K0.5+L0.5)2..... (1)Now, In order to check for returns to scale, multiply the variables K and L…

Q: Does the production function y=0.8x_1x_2 exhibit constant returns to scale, increasing returns to…

A: The inputs such as capital, labour and land are used to produce and output in the market is known as…

Q: A firm's production function is given as: q = K1/3 L1/3 where the rental rate (price) of capital r…

A: Here, firm's production function is given as: q=K1/3L1/3 Rental price (r) is N$60 And, wate rate…

Question

A firm operates in a perfectly competitive output market and a
perfectly competitive input market.
The production function for the firm is:
f(N, K) = 4N K
In the short-run the level of capital is fixed at 27. If the price of
output is 12, and wage rate is $10$, how many workers should
the firm hire?
Draw a diagram of your solution.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A Firms production function is given by Q=L?K +1/L when L 2 1 and K 2 1). Find out AP , MPL , MPx and MRTS,x . At what input condition does APL become equal to MP ?
unconstraint optimization Production function, given Q=L2+K2-2L+1, find the maximum and minimum turning point
How would you determine that a two-input Cobb-Douglas production function has decreasing returns to scale (DRS), increasing returns to scale (IRS) or constant returns to scale (CRS) depending on whether α1 + α2 is larger than, smaller than, or equal to one?
The production function of producing an item is given by 3K Q = 744 VR - where K is the capital required. Calculate the marginal product of capital if the current capital is 512.
Firm D has production function F(K,L) = aK+2L. Very briefly, what is the interpretation of a in this function?
You are given the production function: Q(K,L)=10KαLβ What is the average product of labour, holding capital fixed at K? Simplify fully
Minimize the cost function C=24L +6K of a manufacturing plant has a cobb douglas production function given by f(l,k)= l0.5 k0.5
A firm has the production function q = f(L, K) = min{L¹/2, K1¹/2}. This firm has: increasing returns to scale decreasing returns to scale O None of the above O constant returns to scale
A firm’s short-run production function is in the form of q = aLK +(bL^2)K −(cL^3)K , wherea, b, c > 0 are parameters. K is a constant. (a) Derive the marginal product of labor.(b) Find the level of L, expressed in terms of the parameters, at which the law ofdiminishing marginal product kicks in.
How would you determine that a two-input Cobb-Douglas production function has decreasing returns to scale (DRS), increasing returns to scale (IRS) or constant returns to scale (CRS) depending on whether β is larger than, smaller than, or equal to one?
A firm’s production function is - y = f(X1, X2)= X11/2 + X1X2 , Where X1≥0, X2≥0 1. Find its returns to scale when X1=1, and X2=1
Find out the maximum possible output for a firm with two units of L and 50 units of k when its production function is Q = 5L + 3K