How many hours of labor should be hired to maximize profits

Reference no: EM13218571

Production of widgets (W) uses labor (L) as its only input. The production function is given by W=F(L)=8*L^.5 and the marginal productivity MPL=4/L^.5. If widgets sell for $10, the price of labor is $8/hour, and there is a fixed cost of $25,

a) how many hours of labor should be hired to maximize profits?

b) What is the maximum profit?

Reference no: EM13218571

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