Show all working. Answer questions. If pMP > wi and you want to increase profits, should you increase, decreaseor maintain the level of factor 1?Select one:onO a. IncreaseO b. MaintainO. DecreaseA competitive firm produces a product using the functionf(z1, 12) = 2x6z,. The factor prices are p = $3 and p2 = $4 and thefirm can purchase as much of either factor at the given prices.What is the firm's marginal cost?O a. $2.32O b. $1.74Oc $0.58O d.$1.07

The product of price and the marginal product of good 1 is called Marginal revenue product of good1.…

Answered: If pMP > wi and you want to increase…

If pMP > wi and you want to increase profits, should you increase, decrease or maintain the level of factor 1? Select one: O a Increase O b. Maintain O. Decrease

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Costs And The Supply Of Goods

Section: Chapter Questions

Problem 11CQ

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Question

Show all working. Answer questions.

If pMP > wi and you want to increase profits, should you increase, decrease
or maintain the level of factor 1?
Select one:
on
O a. Increase
O b. Maintain
O. Decrease
A competitive firm produces a product using the function
f(z1, 12) = 2x6z,. The factor prices are p = $3 and p2 = $4 and the
firm can purchase as much of either factor at the given prices.
What is the firm's marginal cost?
O a. $2.32
O b. $1.74
Oc $0.58
O d.$1.07

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