Compute a firm's profit from production function.
Assume that a firm faces the following production function, f (L) =2L0.5 .Furthermore, although the firm cannot set wages, it can set prices, and its inverse demand curve is p=10-f (L). The firm pays workers a wage of $1.
a) How much does the firm produce? Show your work.
b) What are this firm's profits? Show your work.