Scenario 14.1: You Are the Manager of a Firm Producing Green Chalk

Multiple Choice

Scenario 14.1:
You are the manager of a firm producing green chalk. The marginal product of labor is:
MP_L = 24L^-1/2
Suppose that the firm is a competitor in the green chalk market. The price of green chalk is $1 per unit. Further suppose that the firm is a competitor in the labor market. The wage rate is $12.00 per hour.
-Given the information in Scenario 14.1, how much labor will be hired to maximize profit?

A) 1/16
B) 1/2
C) 1
D) 4