Chapter 4.4, Problem 35P

To determine

(a)

To explain:

The practical significance of $f(1000)=400$ and the unit of $f(L).$

To determine

(b)

To explain:

The practical significance of $f\text{'}(1000)=2$ and the unit of $f(L).$

To determine

(c)

To show:

The real wage is $\frac{w}{p}$ tons per hour.

To determine

(d)

To show:

The monthly profit of the company is $\pi (L)=pf(L)-wL$.

To determine

(e)

To show:

The company’s marginal product of labour equals the real wage: $f\text{'}(L)=\frac{w}{p}$.