Question

Assume that a purely competitive firm uses two resources, labor (L)and capital (C), to produce a product. The market price of this product is $1.00. The Marginal Product (MP) and prices of the resources (Pl) and (Pc)are shown in the following four situations below:

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     MPl      MPc       Pl     Pc             MRPl              MRPc

I    30        20          30    40              ______            ______

II    20        20          10    10              ______            ______  

III   10        15           10   15              ______            ______  

IV   30        40           10    5               ______            ______

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a. Calculate the marginal revenue product (MRP) of labor and capital in four situations and put in the above table.

b. Which situation would the firm be maximizing its profit? _______

Show work in detail, neatly, and explain why please. Please do all!