logo
Ask Question

Asked by Jiajia Jiang on May 30, 2024

verifed

Verified

A competitive firm has a production function described as follows."Weekly output is the square root of the minimum of the number of units of capital and the number of units of labor employed per week." Suppose that in the short run this firm must use 16 units of capital but can vary its amount of labor freely.
a.Write down a formula that describes the marginal product of labor in the short run as a function of the amount of labor used.(Be careful at the boundaries.)
b.If the wage is w  $1 and the price of output is p  $4, how much labor will the firm demand in the short run?
c.What if w  $1 and p  $10?
d.Write down an equation for the firm's short-run demand for labor as a function of w and p.

Production Function

Refers to the relationship between input resources (like labor, land, and capital) and the output produced by these resources.

Marginal Product Of Labor

The additional output a firm gains from employing one more unit of labor, holding all other inputs constant.

Demand For Labor

The total amount of workers that employers want to hire at a given wage rate and time period.

  • Acquire insights into the strategy of enhancing profitability in various business scenarios.
  • Compute the marginal products and comprehend their significance in maximizing the utilization of inputs.
  • Comprehend the maximization of resource distribution in a competitive marketplace.
verifed

Verified Answer

ZK
Zybrea KnightJun 04, 2024
Final Answer :
a.MP  1/(2L1/2)if L  16, MP  0 if L  16.
b.4.
c.16.
d.L  (p/2w)2.

Related questions

If the Short-Run Marginal Costs of Producing a Good Are ...

The Production Function Is Given by F(L)  6L 2/3 ...

Jiffy-Pol Consultants Is Paid $1,000,000 for Each Percentage of the ...

During the Height of the Pet Rock Craze in the ...

Jiffy-Pol Consultants Is Paid $1,000,000 for Each Percentage of the ...