A competitive rm has a production function described as follows. “Weekly output is the square root of the minimum of the number of units of capital…

A competitive rm has a production function described as follows. “Weekly output is the

square root of the minimum of the number of units of capital and the number of units of labor

employed per week.” Suppose that in the short run this rm must use 16 units of capital but can

vary its amount of labor freely. a)Write down a formula that describes the marginal product of

labor in the short run as a function of the amount of labor used. (Be careful at the boundaries.)

b) If the wage is w = 1 and the price of output is p = 4; how much labor will the rm demand in

the short run? c) What if w = 1 and p = 10? d) Write down an equation for the rm’s short run

demand for labor as function of w and p.

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"