Suppose that you are starting up a lawn-raking business. All of your workers are required to supply their own rakes, so the only cost to you is hiring labor at an hourly rate. Suppose that the market price of raking someone's yard is $24 per lawn and the hourly wage is $18 per hour. The following graph shows the production function (PF) for your business. On the following graph, use the green line (triangle symbol) to plot the daily isoprofit curve that indicates the profit-maximizing level of output. (Mint: Derive the slope of the isoprofit curve and then move the curve up or down until ies in the position you want; this is because you do not know the amount of profit that will yield the desired curve,.) Then use the black point (plus symbol) to indicate the profit-maximizing level of labor and output per day. Note: You will not be graded on any adjustments made to the graph.

Suppose that you are starting up a lawn-raking business. All of your workers are required to supply their own rakes, so the only cost to you is hiring labor at an hourly rate. Suppose that the market price of raking someone's yard is $24 per lawn and the hourly wage is $18 per hour. The following graph shows the production function (PF) for your business. On the following graph, use the green line (triangle symbol) to plot the daily isoprofit curve that indicates the profit-maximizing level of output. (Mint: Derive the slope of the isoprofit curve and then move the curve up or down until ies in the position you want; this is because you do not know the amount of profit that will yield the desired curve,.) Then use the black point (plus symbol) to indicate the profit-maximizing level of labor and output per day. Note: You will not be graded on any adjustments made to the graph.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.3P

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