question archive You are the manager for a major manufacturer of furniture company
You are the manager for a major manufacturer of furniture company
Subject:EconomicsPrice: Bought3
You are the manager for a major manufacturer of furniture company. You estimated the production function for a particular line of chairs. The estimation reveals a Cobb-Douglas production function is: Q = 3(K)^1/3(L)^2/3 where K represents capital equipment and L is labor. Your company has already spent a total of $10,000 on the 5 units of capital equipment it owns. Due to current economic conditions, the company plans to only hire labor to increase its production. If workers at the firm are paid a competitive wage of $40 and chairs can be sold for $200 each,
a- what is your profit-maximizing level of labor usage?
b- What is the profit?
