Choosing the profit-maximizing quantity demanded of labor

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Question:Consider the following production function for Jack's Painting Services, where L is the number of labor hours and Q is the quantity of closets painted per week.

L Q MPL APL
0 0    
40 10    
80 24    
120 36    
160 44    
200 50    
240 54    

a) What is the MPL at L=120?

b) What is the APL at L=200?

c) If the firm is perfectly competitive, what is the optimal condition for choosing the profit-maximizing quantity demanded of labor?

d) If the firm pays an hourly wage of $15, its price per closet painted is $100, and the firm must pay $1100 in other costs per week, what is the number of labor hours the firm should hire to maximize its profit per week?

e) What is the maximum profit the firm will earn per week?

f) Give and explain 2 examples of factors that might account for any difference in the wages of two of Jack's employees

Reference no: EM133531482

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