Business, 16.08.2021 20:50 DESI111609

A firm’s production function is given by q = 40 ln(EW + EB + 1) where EW and EB are the number of whites and blacks employed by the firm, respectively. From this it can be shown that the marginal product of labor is MPE = 40 / (EW + EB + 1). Suppose the market wage for blacks is $50, the market wage for whites is $100, and the price of each unit of output is $20. (a) How many workers of each race would a non-discriminating firm hire? How much profit is earned if there are no other costs?
(b) How many workers of each race would a firm with a discrimination coefficient of 0.6 against black workers hire? How much profit is earned if there are no other costs?
(c) How many workers of each race would a firm with a discrimination coefficient of 1.2 against black workers hire? How much profit is earned if there are no other costs?

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A firm’s production function is given by q = 40 ln(EW + EB + 1) where EW and EB are the number of wh...

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