Rabelaisian Restaurants has a monopoly in the town of Upper Glutton. Its production function is Q = 10L, where L is the amount of labor it uses and Q is the number of meals produced. In order to hire L units of labor, Rabelaisian Restaurants must pay a wage of 10 + .1L per unit of labor. The demand curve for meals at Rabelaisian Restaurants is given by P = 41 -
. The profit-maximizing output for Rabelaisian Restaurants is
A) 2,000 meals.
B) 20,000 meals.
C) 2,500 meals.
D) 10,000 meals.
E) 1,250 meals.
Correct Answer:
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