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The mgr. of a nat. retailing outlet hired an economist toestimate the firm's production function. based on theeconomist's report, the mgr. now know's the firm's productionfunction is given by Q = K1/2 L1/2 and that capital is fixedat 1 unit.
a. calculate the average product of labor when 9 units of labor are utilized.
b. calculate the marginal product of labor when 9 units of labor are utilized.
c. suppose the firm can hire labor at a wage of $10 per hr.and output can be sold at a price of $100 per unit. determinethe profit maximizing levels of labor & output.
d. what is the maximum price of capital at which the firm willmake nonnegative profits?
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