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Marvin's Milk Farm produces milk and sells it in a perfectly competitive market at $3 per bottle. The following table shows Marvin's weekly total and marginal product schedules, using labor an capital. Assume that labor and capital may be used independently; that is, one is not needed fo the other factor to be productive. Therefore, the total amount of milk that Marvin's produces is obtained by adding together the amount of milk produced by labor and the amount of milk produced by capital. The table also shows total revenue and marginal revenue products (MRP)

Marvin's Milk Farm produces milk and sells it in a perfectly competitive market at $3 per bottle. The following table shows Marvin's weekly total and marginal product schedules, using labor an capital. Assume that labor and capital may be used independently; that is, one is not needed fo the other factor to be productive. Therefore, the total amount of milk that Marvin's produces is obtained by adding together the amount of milk produced by labor and the amount of milk produced by capital. The table also shows total revenue and marginal revenue products (MRP)

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 4PA
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Uncertain how to solve Blank 1: a. 1 unit b. 2 units c. 3 units d. 4 units Blank 2: a. 1 unit b. 2 units c. 3 units d. 4 units Blank 3: a. 1 unit b. 2 units c. 3 units d. 4 units Blank 4: a. 1 unit b. 2 units c. 3 units d. 4 units Blank 5: a. fewer units of labor and capital than b. the same amounts of labor and capital as c. more units of labor and capital than
Marvin's Milk Farm produces milk and sells it in a perfectly competitive market at $3 per bottle. The following table shows Marvin's weekly total and marginal product schedules, using labor and capital. Assume that labor and capital may be used independently; that is, one is not needed for the other factor to be productive. Therefore, the total amount of milk that Marvin's produces is obtained by adding together the amount of milk produced by labor and the amount of milk produced by capital. The table also shows total revenue and marginal revenue products (MRP) of labor and capital. Finally, assume that Marvin's Milk Farm is a factor price taker in the labor and capital markets. Labor costs $54 per week, and capital costs $36 per week. Labor (Number of workers) Capital 0 1 AWN H 2 3 4 8123 & 0 4 Total Product (Bottles) 0 24 42 54 60 Total Product (Bottles) 0 18 34 48 56 Marginal Physical Product (Bottles) Marginal Physical Product (Bottles) 24 18 12 6 18 16 14 8 The profit-maximizing combination of resources is Total Revenue (Dollars) The profit-maximizing combination contains least-cost combination to produce 72 bottles of milk. 54 102 144 168 Total Revenue (Dollars) 72 126 162 180 MRP of Labor (Dollars) of labor and 54 48 42 24 If Marvin's Milk Farm wants to produce 72 bottles of milk per week, the least-cost combination of labor and capital is ♥ of labor and of capital. MRP of Capital (Dollars) 72 54 36 18 of capital. the
Transcribed Image Text:Marvin's Milk Farm produces milk and sells it in a perfectly competitive market at $3 per bottle. The following table shows Marvin's weekly total and marginal product schedules, using labor and capital. Assume that labor and capital may be used independently; that is, one is not needed for the other factor to be productive. Therefore, the total amount of milk that Marvin's produces is obtained by adding together the amount of milk produced by labor and the amount of milk produced by capital. The table also shows total revenue and marginal revenue products (MRP) of labor and capital. Finally, assume that Marvin's Milk Farm is a factor price taker in the labor and capital markets. Labor costs $54 per week, and capital costs $36 per week. Labor (Number of workers) Capital 0 1 AWN H 2 3 4 8123 & 0 4 Total Product (Bottles) 0 24 42 54 60 Total Product (Bottles) 0 18 34 48 56 Marginal Physical Product (Bottles) Marginal Physical Product (Bottles) 24 18 12 6 18 16 14 8 The profit-maximizing combination of resources is Total Revenue (Dollars) The profit-maximizing combination contains least-cost combination to produce 72 bottles of milk. 54 102 144 168 Total Revenue (Dollars) 72 126 162 180 MRP of Labor (Dollars) of labor and 54 48 42 24 If Marvin's Milk Farm wants to produce 72 bottles of milk per week, the least-cost combination of labor and capital is ♥ of labor and of capital. MRP of Capital (Dollars) 72 54 36 18 of capital. the
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