Sells the resulting output of cookies

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Reference no: EM138654

Q. Johnny works for the Great Big Cookie Company (GBC) which buys labor at a wage of $1 an hour, and uses it to produce cookies, which it sells at $p each. GBC has a production function:
C = 2L^(1⁄2) where L is labor input

a) Write down an expression for the profit GBC will make if it uses L units of labor at $1 an hour and sells the resulting output of cookies at $p a cookie. This expression should be in terms of p and L.

b) Maximize GBC's profit to find its demand for labor, Ld, in terms of p.

c) Find its supply of cookies, Cs, also in terms of p.

Reference no: EM138654

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