Use the following profit function (per worker) for the Blue Delta Faucet Company to answer this question. P(e) = 40e - (2e2 + 100)
Note that P = firm profits and e = worker-hours per day.Assume that effort is observed perfectly.What is the profit-maximizing level of effort for the firm to set for workers?
A) There is no effort level that maximizes profits in this case.
B) 3.16 hours per day.
C) 8 hours per day.
D) 10 hours per day.
E) 12 hours per day.
Correct Answer:
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