3. In the short term, a company has the following cost function and product function. C(N)= 10 000 + wN x = f(N) = 5N0.5 The company produces a product that is sold in the market for a price of NOK 1,000 per unit. The workforce has a price of NOK 500 per unit. a) How many units of labor will the company use? b) How many units of the product will the company produce? c) What will be the company's profit? d) Assume that the price of labor is unknown. What will be the company's demand curve for labor as a function of wages? e) Assume that the price of the product is unknown. What will be the company's supply curve for the product as a function of price?

3. In the short term, a company has the following cost function and product function. C(N)= 10 000 + wN x = f(N) = 5N0.5 The company produces a product that is sold in the market for a price of NOK 1,000 per unit. The workforce has a price of NOK 500 per unit. a) How many units of labor will the company use? b) How many units of the product will the company produce? c) What will be the company's profit? d) Assume that the price of labor is unknown. What will be the company's demand curve for labor as a function of wages? e) Assume that the price of the product is unknown. What will be the company's supply curve for the product as a function of price?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 5MC

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