Suppose that a firm uses a production function Q = 0.5K + 12L, where Q is...

Question

Question

Suppose that a firm uses a production function Q = 0.5K + 12L, where Q is output, and K and L are inputs. In the short-run, K is fixed at 20 units. If the firm needs exactly 74 units of Q, how much L should it hire?

business economics

Answer 1

Answer #1

The correct answer is 5.33

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The production function is given as

Q = 0.5K + 12L

In the short run , K is fixed at 20 units and the required output is 74 units.

74 = 0.5 x 20 + 12 L

12L = 64

L = ( 64 12)

L = 5.33

Hence the number of units of L the firm should hire is 5.33.

Answer 2

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