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A firm produces output via the function: Q=L(L^2/800), where Q is the output per week and L is the number of labor hours per week. The firm's additional cost of hiring an extra hour of labor is about $25 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40.

How much labor should the firm employ?

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019

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