Determine the amount of labor a cost minimizing firm

Reference no: EM13238031

A cost minimizing firm has the following short run production function:
Q=f (L,K)=72L+5L2-0.2L3

a) Briefly explain why this is a short run production function.

b) At what level of employment would diminishing returns set in for the variable input?

c) Fin the levels of employment that define stage two in the production process.

d)If the market determined real wage rate is $20 determine the amount of labor a cost minimizing firm would hire in order to minimize the total cost of production.

Reference no: EM13238031

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