Question
In: Economics
The production technology of a manufacturer is estimated to be Q = 150N - .025N2, where...
The production technology of a manufacturer is estimated to be Q = 150N - .025N2, where Q is output and N is labor input. The manufacturer has no constraint in hiring labor.
a. What will be the optimum N and Q under the given assumption.
The tight job market and the skill requirement of the industry that the manufacturer is operating has limited the hiring of the labor to no more than 250.
b. Formulate the optimizing problem of the manufacturer under the new job market condition.
c. Find the optimum N and Q under new condition.
d. What does Lagrangian multiplier imply in this problem?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
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A firm has a production function Q = KL, where Q is the quantity of output,...
A firm has a production function Q = KL, where Q is the quantity
of output, K is the amount of capital and L is the amount of labor.
MPL=K and MPK=L .
a) Suppose that capital is fixed at K=10 in short run. In this
case, the marginal product of labor is MPL=10. Does this production
function exhibit diminishing marginal returns to labor?
b) Suppose that in the short run, K is fixed at 10. The interest
rate is...
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a. At what value of L will
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The Production Function of a perfectly competitive firm is Q = 80L +12L2 -0.5L3, where Q...
The Production Function of a perfectly competitive firm is Q =
80L +12L2 -0.5L3, where Q = Output and L =
labor input
a. At what value of L will
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b. Calculate the range of values
for labor over which stages I, II, and III occur?
c. Suppose that the wage rate is $30
and the price of output is $2 per unit. How many
workers
should the firm hire?
d....
The Production Function of a perfectly competitive firm is Q = 80L +12L2 -0.5L3, where Q...
The Production Function of a perfectly competitive firm is Q =
80L +12L2 -0.5L3, where Q = Output and L =
labor input
a. At what value of L will
Diminishing Returns take effect?
b. Calculate the range of values
for labor over which stages I, II, and III occur?
c. Suppose that the wage rate is $30
and the price of output is $2 per unit. How many
workers
should the firm hire?
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where is the estimated number of units
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_________________.
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$12, M = $30,000, and = $50, the predicted quantity
demanded...
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