Suppose a Perfectly Competitive Firm's Production Function Is Q =

question 3

Multiple Choice

Suppose a perfectly competitive firm's production function is q = L⁰.²K⁰.⁶ and it takes the wage and price as given.Then the firm's long-run demand for labor as a function of K,w,and p is

• A) p5((0.2/w)²(0.6/r)³).
• B) p5((0.2/w)⁴(0.6/r)⁵).
• C) p5((0.2/w)⁵(0.6/r)⁴).
• D) p5((0.2/w)³(0.6/r)²).

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Definitions:

Foster Competition

To encourage or promote a market environment where businesses compete freely with one another, aiming to improve efficiency and innovation.

Income Increase

A rise in the amount of earnings received over a given period of time, whether from wages, investments, or other sources.

Health Care Demanded

The total amount of health care services that consumers are willing to obtain, influenced by factors like price, income, and insurance coverage.

Patient Protection and Affordable Care Act (PPACA)

A United States federal statute aimed at decreasing the number of uninsured Americans and reducing the overall costs of healthcare.