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A Pizza restaurant has the producion function f(L,K) = L14 , K34,

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A Pizza restaurant has the producion function f(L,K) = L1/4
, K3/4, where L is the number of labor hours employed and
K is the number of Pizza ovens. Supposed that the price of
a slice of pizza is $3, w=2 and r=1.
Part a) What is the marginal production labor? What is the
value of the marginal production labor?
*I have gotten teh following so far:
f(L,K) = L1/4, K3/4
f(L)=L1/4
MPl=1/4 K3/4 L-3/4
df(L)
______ = 1/4L -3/4
dL
(P) (MPl)=w = (3) (1/4L -3/4)=2
(L-3/4=2) = 2L3/4
Part b) Short-run 1 pizza oven. Solve for the profit-
maximizing amount of workers the firm will hire.
Part c) Onr the same diragram plot the firm\'s marginal
product of labor and the wage rate.
Solution
Part b) The profit is max when the MPK=MPL
This would mean, w=r, so on calculating,
change in total product dTP/dK=dTP/dL
dK=dL
since K=1

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A Pizza restaurant has the producion function f(L,K) = L1/4 , K3/4, where L is the number of labor hours employed and K is the number of Pizza ovens. Supposed that the price of a slice of pizza is $3, w=2 and r=1. Part a) What is the marginal production labor? What is the value of the marginal production labor? *I have gotten teh following so far: f(L,K) = L1/4, K3/4 f(L)=L1/4 MPl=1/4 K3/4 L-3/4 df(L) ______ = 1/4L -3/4 dL (P) (MPl)=w = (3) (1/4L -3/4)=2 (L-3/4=2) = 2L3/4 Part b) Short-run 1 pizza oven. Solve for the profit maximizing amount of workers the firm will hire. Part c) Onr the same ...
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