Task: The manager of a national retailing outlet recently hired an economist to estimate the firm's production function. Based on the economist's report, the manager now knows that the firm's production function is given by Q = K^(1/2)*L^(1/2) and that capital is fixed at 1 unit.
Q1. Calculate the average product of labor when 9 units of labor are utilized.
Q2. Calculate the marginal product of labor when 9 units of labor are utilized.
Q3. Suppose the firm can hire labor at a wage of $10/hr and output can be sold at a price of $100 per unit. Determine the profit maximizing levels of labor and output.
Q4. What is the maximum price of capital at which the firm will still make non-negative profits?