14. A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm's production function is: X=-0.2L + 18L? + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A. At what weekly output is marginal cost equal to average variable cost? B. if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
14. A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm's production function is: X=-0.2L + 18L? + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A. At what weekly output is marginal cost equal to average variable cost? B. if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.9P
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Transcribed Image Text:14. A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but
labour is variable. The firm's production function is:
X=-0.2L + 18L? + 1620L.
Where X is the number of units of the product per week, and L is the number of persons
employed.
A. At what weekly output is marginal cost equal to average variable cost?
B. if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm
would pay rather than close down?
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