PRINCIPLES OF MICROECONOMICS LOOSE LEAF
PRINCIPLES OF MICROECONOMICS LOOSE LEAF
12th Edition
ISBN: 9780134081083
Author: CASE
Publisher: PEARSON
Question
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Chapter 10, Problem 5.2P

(a)

To determine

Complete the table.

(b)

To determine

Profit maximizing output.

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Billy is renting trucks that will be used to install solar panels. The table below presents the marginal product (in terms of solar panels installed per week) of various trucks. Assume this is a perfectly competitive market.   a. What is the marginal revenue product of each truck if the current market price to install one solar panel is $50? What if the current market price is $100? $150? Using the table below, fill in the “Marginal Revenue Product” columns for each price.  Labor Productivity and Marginal Revenue Product for Solar Panel Installers Capital (trucks) Marginal Product (solar panels) Marginal Revenue Product for P = $50 (dollars) Marginal Revenue Product for P = $100 (dollars) Marginal Revenue Product for P = $150 (dollars) 1 24       2 21       3 18       4 15       5 12       6 9       b. Suppose the cost to rent a truck is $900.     How many trucks will be rented in the price of a solar panel is $50?     trucks     How many trucks will be…
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After which administrative assistant do diminishing marginal returns begin for Jose's Tax Office? Explain using numbers. (b) Assume Jose's Tax Office sells its tax advisory services in a perfectly competitive market at a unit price of $4. Calculate the marginal revenue product of the fifth administrative assistant. Show your work. (c) Jose's Tax Office hires administrative assistants in a perfectly competitive labor market for administrative assistants at a wage rate of $90 per hour, and the market price of services remains $4. How many administrative assistants will Jose's Tax Office hire to maximize its profit? Explain using marginal analysis (d) Assume administrative assistants and office software are substitutes in providing tax advisory services by all tax firms in the market. If office software, a fixed input, becomes more expensive and Jose's Tax Office provides the same quantity of tax advisory services, will each of the following increase, decrease, or stay the same? (i) The…
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