Solution-Explain the management and profitability impacts

Explain the management and profitability impacts

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Reference no: EM131426695

A firm has a production function of Q = L^1/3K ^2/3

If wages are $13, the price of the final product is $39 and Capital is 27, how many employees will the firm employ?
If a piece of capital equipment is infinitely lived (with proper operational maintenance), How many pieces of capital would the firm employ (at a machine cost of $100 and an interest rate of 24.75%), given the production function offered and the employment level arrived at in question #6A (do not use the Capital number from A)? Please show your work.

Choose two examples and explain the management and profitability impacts of these two issues
- Rise in interest rates. How do you use your issues of marginal product to address this increase in interest expense?
- Rise in wages. How do you use your issues of marginal product to address this increase in wage expense?

Reference no: EM131426695

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Explain the management and profitability impacts

Reference no: EM131426695

Reference no: EM131426695

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