In Problem 1, the Production Function Is Given by F(L)

question 21

Multiple Choice

In Problem 1, the production function is given by F(L) . Suppose that the cost per unit of labor is $12 and the price of output is 9, how many units of labor will the firm hire?

• A) 54
• B) 81
• C) 13.50
• D) 27
• E) None of the above.

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Definitions:

Work In Process

Inventory consisting of items that are in the production process but not yet completed.

Cost of Goods Manufactured

The total production cost of goods that have been completed in a specific accounting period.

Finished Goods Inventory

The stock of completed products ready for sale.

Cost of Goods Sold

The direct costs attributable to the production of the goods or services sold by a company, including materials and labor costs.