Managerial Economic Assignment

| December 4, 2015

Managerial Economic Assignment
Question (1):

Find the relation:
A/PQ=P-MC/P ?_A^d¦? (A=0)?

When A: is Advertising
Proof the Business firm which operating in pure competitive market structure needs no advertising? ( proof by Equations mathematically).
Question (2):

A business firm produce an output Q by using the cobb-doglass production function:


Where Q: output quantity
K: units of physical capital
L: unit of labor.

IF: the unit of capital is fixed at one unit (K=1) and the wages rate is equal to (2), while the selling price (P=10), how much units of labor are needed at the profit maximization level.

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