Short-run production function of competitive firm

Assignment Help Business Economics
Reference no: EM131090770

Third Problem The short-run production function of a competitive firm is given by f(L) = 6L 2/3 , where L is the amount of labor it uses. The cost per unit of labor is w = 6 and the price per unit of output is p = 3. 1. Plot a few points on the graph of this firm’s production function and sketch the graph of the production function, using blue ink. Use black ink to draw the isoprofit line that passes through the point (0, 12), the isoprofit line that passes through (0, 8), and the isoprofit line that passes through the point (0, 4). 2. What is the slope of each of the isoprofit lines? 3. How many points on the isoprofit line through (0, 12) consist of inputoutput points that are actually possible? 4. Make a squiggly line over the part of the isoprofit line through (0, 4) that consists of outputs that are actually possible. 5. How many units of labor will the firm hire? How much output will it produce? If the firm has no other costs, how much will its total profits be? 6. Suppose that the wage of labor falls to 4, and the price of output remains the same. Will the firm increase its output?

Reference no: EM131090770

Questions Cloud

Aspects of human resource management : Your paper should discuss the change aspect of Human resource management in general and in accordance with the Zhejiang Geely Holding Group Co. Ltd also discuss the 7 aspects of Human resource management how the company trains newly hired workers and..
Is the marginal product of labor increasing : First Problem The production function for fragles is f(K, L) = L/2 + K, where L is the amount of labor used and K the amount of capital used. Does this technology demonstrates increasing, constant or decreasing returns to scale? Is the marginal produ..
Is the technology available to this firm convex : Second Problem General Monsters Corporation has two plants for producing juggernauts, one in Flint and one in Inkster. The Flint plant produces according to fF (x1, x2) = min{x1, 2x2} and the Inkster plant produces according to fI (x1, x2) = min{2x1,..
How current cost estimate compare with initial cost estimate : Visit the Project Library (Links to an external site.) and review the documents concerning Costs and Funding. How do current cost estimates compare with initial cost estimates? Does this match the material your authors provide on project crashing?..
Short-run production function of competitive firm : Third Problem The short-run production function of a competitive firm is given by f(L) = 6L 2/3 , where L is the amount of labor it uses. The cost per unit of labor is w = 6 and the price per unit of output is p = 3. 1. Plot a few points on the graph..
The expected monetary value of this investment : A person has a chance to invest $50,000 in a business venture. If the venture works, the investor will reap $200,000. If the venture fails, the investor will lose his money. It appears that there is about a .50 probability of the venture working. ..
Prepare for future security threats and problems : Create a checklist for at least one of these areas that a company might use to assess security and prepare for future security threats and problems.
Number of labor-hours spent squeezing them : Fifth Problem Earl sells lemonade in a competitive market on a busy street corner in Philadelphia. His production function is f(x1, x2) = x 1/3 1 x 1/3 2 , where output is measured in gallons, x1 is the number of pounds of lemons he uses, and x2 is t..
Find the percentage change in quantity demanded : If the price of good X decreases by 2.1% and the price elasticity of demand is 0.4, find the percentage change in quantity demanded and the percentage change in revenue. If you want to increase revenue should you increase or decrease the price in thi..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Describe the growth of economic role of federal government

Describe the growth of the economic role of the federal government since the 1930s. Give two examples of public goods or services that you use. If you could order a cut of $100 billion in federal spending, which programs would you cut and why would y..

  Labor supply and labor demand

Illustrate the solution graphically using Labor Supply / Labor Demand and Production Function diagrams.

  Illustrate what makes measuring economies of localization

Illustrate what makes measuring economies of localization or economies of urbanization difficult.

  Paying the compounded interest rate

Suppose my grand grandmother in 1909 put $100 in the bank account for me. The bank has been paying the compounded (annual compounding) interest rate of 5% per year. If I go and pick up this money now (that is in 2009) how much money will I get?

  What indictors are evident that there is too much

What indictors are evident that there is too much or too little money within the economy? How is monetary policy aiming to adjust this?

  What are the key contributions of small business

What are the key contributions of small business to the U.S. economy? Rank the benefits in terms of importance, and provide the reasons for your ranking.

  Describe the goals of the factory owners

Describe the goals of the factory owners? Describe the goals of the employees? Describe the problem caused by the scarcity. What is the price of a life.

  Should roscoe rascals match the price offered

Two months after it began selling the food, its pet food sales declined dramatically because a competitor across the street started selling the identical food for $ 22 per bag. Should Roscoe's Rascals match the price offered by the competitor.

  What is the maximum price you would pay for the stock today

You plan to buy a common stock and hold it for one year. You expect to receive both $1.50 from dividends and $26 from the sale of the stock at the end of the year. If you wanted to earn a 15 percent rate of return, what is the maximum price you would..

  Analyse what is being done in the industry

HI5003 Economics for Business. Cost of production- in any industry in Australia where costs of production are an important issue and analyse what is being done in the industry. May be the industry is switching to technology or/and some substitutes..

  Demonstrate the equilibrium solution for the monopsonist

A monopsony firm will not pay as much for factors of production as will a firm in a competitive market for inputs. Graphically, demonstrate the equilibrium solution for the monopsonist and explain why this is different than the competitive solution.

  Find equilibrium price and equilibrium quantity

Robinson's demand for pineapples is given as Q = 40 - 4P while Friday's is Q = 20 - P. Supply is given as Qs = 6 + P, and Pc = $1. Find equilibrium price, equilibrium quantity, and the amounts Robinson and Friday will both end up consuming.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd