Rabelaisian Restaurants has a monopoly in the town of Upper Glutton.Its production function is Q = 40L, where L is the amount of labor it uses and Q is the number of meals produced.Rabelaisian Restaurants finds that in order to hire L units of labor, it must pay a wage of 40 + .1L per unit of labor.The demand curve for meals at Rabelaisian Restaurants is given by P = 13.75 - Q/1,000.The profit-maximizing output for Rabelaisian Restaurants is
A) 12,000 meals.
B) 1,000 meals.
C) 6,000 meals.
D) 1,500 meals.
E) 750 meals.
Correct Answer:
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