Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 25, Problem 3CQ
(a):
To determine
Quantity of operators hired at a weekly wage of $250.
(b):
To determine
Maximum profit of the firm when the fixed cost is $1,500 per week.
(c):
To determine
Condition of the firm when the market price for each statement falls to $150.
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Students have asked these similar questions
* The marginal product of a factor shows how much an additional unit of a factor adds to
unit costs:
- the level of production.
- profitability.
- dollar revenue.
* The marginal revenue product of a factor shows how much an additional unit of a factor adds to
the level of production:
- dollar revenue.
- profitability.
- unit costs.
* A profit‑maximizing firm operating in a perfectly competitive market will add new units of a factor of production until:
- marginal revenue product equals factor price.
- marginal product equals factor price.
- marginal revenue product equals marginal product.
- marginal revenue product equals marginal revenue.
QUESTION 15
Answer this question based on the information in the table:If hiring the 6th worker increases total product by 7 units and the price of each unit is $2, which of the following is true?
Number of Workers
Total Cost
0
50
1
110
2
160
3
200
4
240
5
250
6
260
7
280
8
310
9
350
10
400
The firm should not hire the 6th worker as MR<MC.
Marginal revenue equals $2.
The firm should hire the 6th worker as MR>MC.
The firm should not hire the 6th worker as MR<TC.
Why does a profit-maximizing firm hire workers up to the point where the wage equals the value of marginal product? Show that this condition is identical to the one that requires a profit-maximizing firm to produce the level of output where the price of the output equals the marginal cost of production.
Chapter 25 Solutions
Economics: Private and Public Choice (MindTap Course List)
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