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Suppose Woody Chuck's Business Is to Clear Trees for Housing q=.01Lq = .01 \sqrt { L }

Question 10

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Suppose Woody Chuck's business is to clear trees for housing developments.Given the constraints of fixed capital,the production function is q=.01Lq = .01 \sqrt { L } .Suppose Woody Chuck's is one of many firms clearing land and that the market price per cleared lot is $5000.(Note MPL=.005LM P _ { L } = \frac { .005 } { \sqrt { L } } ) How many workers will Woody Chuck hire at w = 6.25?


A) 1
B) 4
C) 16
D) 25

Correct Answer:

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