Brine Freez sells salty ice cream. Their daily production is given by the function: Q...

Brine Freez sells salty ice cream. Their daily production is given by the function:

Q = 10 + K + 4L + 20KL – K² – 2L²

Where Q is servings per day, K is capital (set at 1), and L is labor.

(10) Describe in words what the production function equation is saying. Be clear about units of measure. What is the general shape of this function?
Using the appropriate data set above,
1. (10) Calculate the marginal product of labor and show in simplest form. (Show work.)
1. (10) Explain in your own words what exactly this marginal product number means (what it is measuring) when L = 2.
2. (10) Calculate the number of workers (L) that would maximize Brine Freez output (L^max). (Show your work for partial credit.
1. (5) What is the predicted number of Brine Freez servings that results from hiring this number of workers (L)?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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