Perfectly competitive firm operates in short-run with labor

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Reference no: EM131172276

A perfectly competitive firm operates in the short-run with labor as its only variable factor. Its production function is:

Q = -L³ + 10L² + 88L

where Q is output per week measured in tons and L is the number of workers employed. The weekly wage is $324 and the product sells for $3.24 per ton.

(a) At what weekly output is marginal cost equal to average variable cost?

(b) What is the minimum product price at which the firm will operate in the short-run?

(d) Calculate the firm's point elasticity of demand for labor at the equilibrium in (c) above.

Reference no: EM131172276

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