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:

Output Produced

The total amount of goods and services produced by a firm or an economy during a specific period.

Input

Resources used in the process of production, including raw materials, labor, and capital.

Marginal Revenue Product

The additional revenue generated from using one more unit of input.

Marginal Product

The extra output generated from increasing a particular input by one unit while keeping all other inputs unchanged.