Reference no: EM132151350

Question: A firm production function is given by q(l,k) = l^0.5·k^0.5, where q is number of units of output produced, l the number of units of labor input used and k the number of units of capital input used. This firm profit function is p = p·q(l,k) - w·l - v·k, where p is the price of output, w the wage rate of labor and v the rental rate of capital. In the short-run, k = 100. This firm hires its profit maximizing level of labor input. In the short-run, this firm demand equation for labor l is a factor a of (p/w)²: l = a (p/w)². In this specific case, factor a is equal to [a]. (HINT: This is unconstrained profit maximization problem. Set your first order condition by taking the derivative of your profit function with respect to l equal to zero, assume the second order condition is satisfied, and solve for l. NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed.)