Problem
Suppose the production function for a competitive firm is Q = Ky25. The firm sells its output at a price of $32 and can hire labor at a wage rate of $2. Capital is fixed at 1 unit.
a. What is the profit-maximizing quantity of labor?
b. If the price of capital is $4, what is the maximum profit?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.