Explore BrainMass
Share

Profit maximization

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?

© BrainMass Inc. brainmass.com July 23, 2018, 1:46 pm ad1c9bdddf

Solution Summary

The firm's hourly profit is determined.

$2.19