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The short-run production function for a firm in the business of calculator assembly is given by q= 2√L where “q” is finished calculator output and “l” represents hours of labor input. The firm is a price taker for both calculators (which sell for “p”) and workers (which can be hired at a wage rate of “w” per hour).
1. Find the profit-maximizing level of labor.
2. What is the short-run supply function for assembled calculators?
3. What is the effect of a change in the wage on Labor?
4. What is the own-price elasticity of supply for calculators?
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