Suppose you are an efficiency expert hired by a manufacturing firm that uses the K and E as inputs. The production function for a competitive firm is Q = K^1/2 E^1/2. The firm sells its output at a price of $32, and can hire labor at a wage of $12.44 per hour. In the short run, the capital is fixed at the 49 units.
1. Determine the short run production function?
2. Calculate the Marginal Product of Labor.
3. Determine the Value of the Marginal Product of Labor
4. Determine the Marginal Cost of producing one more unit of output.
5. Describe the profit-maximizing quantity of labor?
6. Explain the profit-maximizing output level?
7. Graph your results labeling as many points as you can
8. Discuss the maximum price of capital at which the firm will still make nonnegative profits?