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?
Using the CD data estimate a quadratic cost function. Test the hypothesis that there is diminishing marginal cost. Be sure to state what critical value you are using. Then, using t
Labor demand for low-skilled workers in the United States is w= 24 -0.1E where E is the number of workers (in millions) and w is the hourly wage. There are 120 million domestic U.S
Marginal Revenue Marginal revenue is the additional revenue an organization receives resulting from the sale of one more item of output. Marginal revenue is calculated by takin
Other Determinants 1. Rate of Interest Is contained in the argument of the classified economists who argued that rational consumers will save more and consume les
Q. Explain Maximising revenue method? In a number of cases, a firm's demand and cost conditions are such that marginal profits are greater than zero for all levels of productio
I can''t figure out the economic model of a company that I''m supposed to write a report about. The company is a tier 2 supplier, and over the years has bought out several subsidia
A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with
1. What is the difference between a static (master) budget and a flexible budget? Ans: static budget is where a budget doesn't change a volume changes. An example could be th
Exceptional supply curves In have some situations the slope of the supply curve may be reversed. i) Regressive Supply. In this case, the higher the price within a ce
Now, let's modify our model a bit. Let's add a fourth sector of spending so that Y = C + I + G + X n with X = X o and M = M = f (Y). Will this change, by itself, increase, decrea
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