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Title: Trisha's Fashion Boutique production function for dresses is y(K, L) = K1/2L1/3, where K is the ... Post by: Satsume on Oct 24, 2017 Trisha's Fashion Boutique production function for dresses is y(K, L) = K1/2L1/3, where K is the number of sewing machines and L is the amount of labor hours employed. Trisha pays $15 per labor hour and sells each dress for $87.50. Also, Trisha currently has 4 sewing machines. Fill in the table below. How many units of labor will Trisha employ before the value of the marginal product of labor is less than the cost of a labor hour?
y L MPL = $87.50(MPL) 1 20 40 60 80 Title: Re: Trisha's Fashion Boutique production function for dresses is y(K, L) = K1/2L1/3, where K is the ... Post by: LBCea on Oct 24, 2017 y L MPL = $87.50(MPL)
2 1 0.666667 58.33333 5.428835 20 0.245602 21.49018 6.839904 40 0.194935 17.05677 7.829735 60 0.170291 14.90046 8.617739 80 0.15472 13.53797 As the above table illustrates, when Trisha moves from employing 40 labor hours to 60 labor hours, the value of the marginal product of labor falls under the marginal cost of labor at $15. |