Making dresses is a labor-intensive process indeed


Making dresses is a labor-intensive process. Indeed, theproduction function of a dressmaking firm is well described by theequation Q = L - L2/800, where Q denotes the number ofdresses per week and L is the number of labor hours per week. The firm's additional cost of hiring an extra hour of labor isabout $20 per hour (wage plus fringe benefits). The firm faces the fixed selling price P $40.

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Econometrics: Making dresses is a labor-intensive process indeed
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