A firm’s only variable factor is labour and it produces a single product, X. It also has fixed costs. The short-run production function is; X=-0.1L3 + 6L2 + 12L. Where X is the output in tons, and L is the number of persons employed. What is the quantity of X when average variable cost is minimized? If the weekly wage is $360 and the price of X is $30 per ton, how much X should be produced to maximize profits?

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