In the Elwyn Company, the relationship between output (Q) and the number of hours of skilled labor (S) and unskilled labor (U) is Q 300S 200U – 0.2S2 – 0.3U2 The hourly wage of skilled labor is 10, and the hourly wage of unskilled labor is 5. The firm can hire as much labor as it wants at these wage rates. Elwyns chief engineer recommends that the firm hire 400 hours of skilled labor and 100 hours of unskilled labor. Evaluate this recommendation. If the Elwyn Company decides to spend a total of 5,000 on skilled and unskilled labor, how many hours of each type of labor should it hire If the price of a unit of output is 10 (and does not vary with output), how many hours of unskilled labor should the company hire (Chapter 5 problem 1. see answer on webct assignment 2) The Smith Company made and sold 10,000 metal tables last year. When output was between 5,000 and 10,000 tables, its average variable cost was 24. In this output range, each table contributed 60 percent of its revenue to fixed costs and profits. What was the price per table If the Smith Company increases its price by 10 percent, how many tables will it have to sell next year to obtain the same profit as last year

If the Smith Company increases its price by 10 percent, and if its average variable cost increases by 8 percent as a result of wage increases, how many tables will it have to sell next year to obtain the same profit as last year Chapter 6 problem 12. see answer on webct assignment 2) Raleigh Company is a monopolist, producing and selling the product with the demand curve P 30 – 6Q where P is price (in thousands of dollars) and Q is the firms output (in thousands of units). The firms total cost function is TC 14 3Q 3Q2 where TC is total cost (in millions of dollars) What is the firms marginal revenue (MR) and marginal cost (MC) At what level of output does the firm maximize its profit What is the profit maximizing price (P) of the firm Is the price higher than marginal cost (MC) What is the profit of the firm (Chapter 8 problem page 267) 4. James Pizzo is president of a firm that is the price leader in the industry that is, it sets the price and the other firms sell all they want at that price. In other words, the other firms act as perfect competitors. The demand curve for the industrys product is P 300 – Q, where P is the price of the product, and Q is the total quantity demanded. The total amount supplied by the other firms is equal to Qr, where Qr 49P.