The firm receives 5 for each car washed and the hourly, Ask an Expert

Economics

Answer to "Profit Maximization" problem

The owner of the car wash believes that the relationship between the number of cars washed and labor input is Q = -0.8 + 4.5L - 0.3L2, where Q is the number of cars washed per hour, and L is the number of people employed per hour. The firm receives $5 for each car washed, and the hourly wage rate for each person employed is $4.5. Assume that other costs are negligible.

A. How many people should be employed to maximize profit?

B. What will be the firms hourly profit?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M925331

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