In each of the following four cases, MRPL and MRPC refer to the marginal revenue products of labor and capital, respectively, and PL and PC refer to their prices. Indicate in each case whether the conditions are consistent with maximum profifits for the firm. If not, state which resource(s) should be used in larger amounts and which resource(s) should be used in smaller amounts.a. MRPL = $8; PL = $4; MRPC = $8; PC = $4b. MRPL = $10; PL = $12; MRPC = $14; PC = $9c. MRPL = $6; PL = $6; MRPC = $12; PC = $12d. MRPL = $22; PL = $26; MRPC = $16; PC = $19
In each of the following four cases, MRPL and MRPC refer to the marginal revenue products of labor and capital, respectively, and PL and PC refer to their prices. Indicate in each case whether the conditions are consistent with maximum profifits for the firm. If not, state which resource(s) should be used in larger amounts and which resource(s) should be used in smaller amounts.a. MRPL = $8; PL = $4; MRPC = $8; PC = $4b. MRPL = $10; PL = $12; MRPC = $14; PC = $9c. MRPL = $6; PL = $6; MRPC = $12; PC = $12d. MRPL = $22; PL = $26; MRPC = $16; PC = $19
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.10P
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In each of the following four cases, MRPL and MRPC refer to the marginal revenue products of labor and capital, respectively, and PL and PC refer to their prices. Indicate in each case whether the conditions are consistent with maximum profifits for the firm. If not, state which resource(s) should be used in larger amounts and which resource(s) should be used in smaller amounts.
a. MRPL = $8; PL = $4; MRPC = $8; PC = $4
b. MRPL = $10; PL = $12; MRPC = $14; PC = $9
c. MRPL = $6; PL = $6; MRPC = $12; PC = $12
d. MRPL = $22; PL = $26; MRPC = $16; PC = $19
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