ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose the short-run production function for a restaurant producing a
pack of food is given by:
Q = 3L – 0.312
Where Q is the number of packs of food produced and L is the amount of
labour used. If the cost of a unit of labour is ¢6 and the unit price of a pack
of food produced is ¢10,
a) what is the amount of labour the restaurant should employ in order to
maximize profit.
b) How much profit is made?
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Transcribed Image Text:Suppose the short-run production function for a restaurant producing a pack of food is given by: Q = 3L – 0.312 Where Q is the number of packs of food produced and L is the amount of labour used. If the cost of a unit of labour is ¢6 and the unit price of a pack of food produced is ¢10, a) what is the amount of labour the restaurant should employ in order to maximize profit. b) How much profit is made?
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