If the price of output sells for $0.80 each, determine the profit maximizing quantities of labor and capital that should be used, assuming the price of labor is $4 and the price of capital is $8. If labor and capital are the only inputs, compute the profi
1. If the price of output sells for $0.80 each, determine the profit maximizing quantities of labor and capital that should be used, assuming the price of labor is $4 and the price of capital is $8. If labor and capital are the only inputs, compute the profit of this firm.
Labor | MPL | MRPL | MRPL/PL | Capital | MPK | MRPK | MRPK/PK |
1 | 24 |
| 1 | 40 | |||
2 | 16 |
| 2 | 30 | |||
3 | 12 |
| 3 | 28 | |||
4 | 8 |
| 4 | 10 | |||
5 | 4 |
| 5 | 5 |
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If the price of output sells for $0.80 each, determine the profit maximizing quantities of labor and capital that should be used, assuming the price of labor is $4 and the price of capital is $8. If labor and capital are the only inputs, compute the profi
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Explain the rule for determining the optimal resource use for a single resource or input and...
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Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
b) How much output should the monopolist produce in order to maximize profit? c) How much...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
A firm discovers that when it uses K units of capital and L units of labor,...
A firm discovers that when it uses K units of capital and L units of labor, it is able to produce X = L^1/4*K^3/4 units of output. a. Draw the graph of isoquants in labor-capital plane. b. Suppose that the firm produces 24 units of output using 16 units of capital and 81 units of labor. Compute MRTS subscript LK. Compute the MPL. Compute the MPK. c. On the basis of your answer to part (b), is the equation MRTS...
Consider the table 7-2. a. If the market price is $2.22 determine the profit maximizing output....
Consider the table 7-2.
a. If the market price is $2.22 determine the profit maximizing
output.
b. If the market price is $1.50 determine the profit maximizing
output.
c. If the market price is $5.00 determine the profit maximizing
output.
Marginal Cost (MC) (10) (6) 20 140 TABLE 7-2 Short-Run Costs: Fixed Capital and Variable Labour Inputs Output Total Costs Average Costs Capital Labour Fixed Variable Total Fixed Variable Total (K) (L) (2) (TFC) (TVC) (TC) (AFC) (AVC) (ATC) (2)...
The equilibrium price at which a perfectly competitive firm sells its good is $8. The profit-maximizing...
The equilibrium price at which a perfectly competitive firm sells its good is $8. The profit-maximizing quantity of output is 200 units. At this quantity of output, the firm has an average fixed cost of $4 and an average variable cost of $s. In the short this perfectly competitive firm should
1. Consider a firm that uses capital and labor as inputs and sells 20,000 units of...
1. Consider a firm that uses capital and labor as inputs and sells 20,000 units of output per year at the going market price of $15. Also assume that total labor costs to the firm are $240,500 annually. Assume further that the total capital stock of the firm is currently worth $400,000, that the return available to investors with comparable risks is 9 percent annually, and that there is no depreciation Is this a profitable firm? Explain your answer. O...
17a) Assuming the monopoly pictured is a profit-maximizing monopoly, what price will the monopoly charge for...
17a) Assuming the monopoly pictured is a profit-maximizing
monopoly, what price will the monopoly charge for its output?
A: $4
B: $5
C: $6
D: $7
E: $8
17b) Assuming the monopoly (above picture, 16a) a
profit-maximizing monopoly, what quantity of output would maximize
revenue?
A: 1
B: 2
C: 3
D: 4
E: 5
8 7 6 5 4 ATC=MC 3 2 1 MR P=D 0 1 2 3 4 5 6 7 8 9 10 Quantity (millions)
QUESTION 1 If labor is on the vertical axis and capital is on the horizontal axis,...
QUESTION 1 If labor is on the vertical axis and capital is on the horizontal axis, the slope of an isocost line is given by: O a. -PL/PK O b.-PK/PL OC. -MPLIMPK d. -MP IMPL O e. -PKPL QUESTION 2 You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40,r = $100, MP L = 20, and MP K = 40...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
b) How much output should the monopolist produce in order to
maximize profit?
c) How much labor should the firm hire to produce this
output?
d) How Much Capital should the firm hire?
e) What price should the monopolist charge?
f) What is the deadweight loss?
g) What is the Price Elasticity of Demand at the
profit-maximizing price and quantity?
3. Suppose a monopolist has a production function given by Q = L12K12. Therefore, L2 MPL K2 2/12 , and...
Consider the table 7-2.
a. If the market price is $2.22 determine the profit maximizing
output.
b. If the market price is $1.50 determine the profit maximizing
output.
c. If the market price is $5.00 determine the profit maximizing
output.
Marginal Cost (MC) (10) (6) 20 140 TABLE 7-2 Short-Run Costs: Fixed Capital and Variable Labour Inputs Output Total Costs Average Costs Capital Labour Fixed Variable Total Fixed Variable Total (K) (L) (2) (TFC) (TVC) (TC) (AFC) (AVC) (ATC) (2)...
The equilibrium price at which a perfectly competitive firm sells its good is $8. The profit-maximizing quantity of output is 200 units. At this quantity of output, the firm has an average fixed cost of $4 and an average variable cost of $s. In the short this perfectly competitive firm should
1. Consider a firm that uses capital and labor as inputs and sells 20,000 units of output per year at the going market price of $15. Also assume that total labor costs to the firm are $240,500 annually. Assume further that the total capital stock of the firm is currently worth $400,000, that the return available to investors with comparable risks is 9 percent annually, and that there is no depreciation Is this a profitable firm? Explain your answer. O...
17a) Assuming the monopoly pictured is a profit-maximizing
monopoly, what price will the monopoly charge for its output?
A: $4
B: $5
C: $6
D: $7
E: $8
17b) Assuming the monopoly (above picture, 16a) a
profit-maximizing monopoly, what quantity of output would maximize
revenue?
A: 1
B: 2
C: 3
D: 4
E: 5
8 7 6 5 4 ATC=MC 3 2 1 MR P=D 0 1 2 3 4 5 6 7 8 9 10 Quantity (millions)
QUESTION 1 If labor is on the vertical axis and capital is on the horizontal axis, the slope of an isocost line is given by: O a. -PL/PK O b.-PK/PL OC. -MPLIMPK d. -MP IMPL O e. -PKPL QUESTION 2 You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40,r = $100, MP L = 20, and MP K = 40...
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