Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Northern Lumber operates a large lumber-processing mill in a small town in Washington State. It is one of the larger lumber producers in the region and has some market power in the sale of that product. A recent consulting study has indicated that the price elasticity of demand for the firm's product is about -3.0. Also, Northern is the dominant employer in the local labor market, and effectively can be considered as a monopsonist in the purchase of labor. The firm's labor demand (i.e. marginal revenue product) function is; MRP = 1 000 - 2Lwhere L is the number of workers. Because of its size relative to the labor supply in the area, Northern faces an upward sloping labor supply function, w = 50 + 0.025L and ME = 50 + 0.050Lwhere w is the daily wage rate and ME is the marginal expenditure on labor.
Once the firm determines the optimal rate of labor input and the wage rate, the rate of output is determined. The firm uses a cost-plus pricing formula that includes the price elasticity of demand as a determinant in setting product price. The same study indicated that average cost is about RM300 per unit (1 000 board feet) of lumber.
Requirements
1. Determine the amount of labor that the firm should employ in order to maximize profit.
2. Determine the wage rate the firm will have to pay.
3. What price will the firm charge per unit of output?
explain the role of managerial economist
Practical Importance of the knowledge of Price Elasticity of demand The practical importance of the measures of elasticity of demand is to be appreciated in various ways:
Q. Explain Discrete-event simulation? Discrete-event simulation: Operation of a system is signified as a chronological sequence of events. Every event take place at an instan
Lender of Last Resort The central bank also acts as the lender of last resort. Historically, this function developed out of the special position of the central banks. The centr
Joe is evaluating the marketing strategy at his restaurant and inn. Suppose that in response to a $2.00 off sales promotion for spaghetti dinners, Joe finds that nightly dinner sal
examples
Factors affecting the long run trend of the Terms of Trade for developing countries Most Third World countries have been faced by a fall in their terms of trade over the long
define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making
Question 1: a. What are the different channels of monetary policy? b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberaliz
Bank Rate Bank rate is the rate at which the central bank gives loans to the commercial banks against the security of government and other approved first class securities. In
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd