Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2/(23*100), where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $5 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40. How much labor should the firm employ? (Round your answer to the nearest whole number.

Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2/(23*100), where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $5 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40. How much labor should the firm employ? (Round your answer to the nearest whole number.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.3P

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