Suppose a firm's production function is given by
Q =10*(Ew+Eb)^0.5 ,
where Ew and Eb are the number of white and black workers employed by the firm, respectively, and Q refers to the quantity of output produced. It can be shown that the marginal product of labor is given by: MPE = 5/[(Ew+Eb)^0.5]
Suppose the market wage for black workers is $10, the market wage for white workers is $20, and the price of each unit of output is $100.
a. How many workers does the firm hire if it does not discriminate (how many of each race...be specific)? How much profit does the firm make, assuming labor is the only cost of production?