A Firm Has the Following Short Run Total Product Curve

question 12

Essay

A firm has the following short run total product curve:
TP_L = Q = 10.5L + 1.5L² - .0625L³
where labor, L, is the only variable input and TP_L is the total output produced per day. Assume the firm faces a fixed price of $16.00 per unit for its output. Also assume that only whole units of output are possible.
a. If the firm must pay a market-determined wage rate of $60.00 per day for each unit of labor hired, how much labor should it employ?
b. If the firm's daily fixed costs total $1000.00, what will be its total profit per day?

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Definitions:

Subcutaneous Injection

A method of administering medication into the fatty layer of tissue just beneath the skin.

Insulin

A hormone produced by the pancreas that allows your body to use sugar (glucose) from carbohydrates in the food for energy or to store glucose for future use.

Medication Abuse

The improper or unsafe use of drugs, often leading to addiction and health problems, which can be either prescription or over-the-counter substances.

Medication Dependence

A condition in which an individual requires a medication to function normally and experiences physical or psychological effects from withdrawal.