Say a firm that sells its product at a price of $40 is using 20 units of capital. If the marginal product of the last unit of capital used was 50, and the constant rental rate of capital is $2,000, then this firm should Multiple Choice acquire more capital. decrease the amount of capital. continue to use same units of capital. decrease its output.

Say a firm that sells its product at a price of $40 is using 20 units of capital. If the marginal product of the last unit of capital used was 50, and the constant rental rate of capital is $2,000, then this firm should Multiple Choice acquire more capital. decrease the amount of capital. continue to use same units of capital. decrease its output.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 3SQ

See similar textbooks

Similar questions

Roland Umbrellas has a production function given by Q = L0.5K0.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Roland want to buy for each unit of labor?
Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000. The lease A. is part of the marginal cost of operating the tattoo parlor. B. is an implicit cost of operating the tattoo parlor. C. is a variable cost of operating the tattoo parlor. D. is a fixed cost of operating the tattoo parlor.
Sugar Enterprises manufactures high speed personal computers as its main product line. Its short run production function is given by Q = 3600K - 4.5K² where Q is the number of computers produced in a week and K pertains to the number of units of capital. c.) Compute the marginal product of the 200th unit of capital. d.) How many computers can be produced by the firm in a week if there are 200 units of capital? e.) Compute the marginal product of the 300th unit of labor. f.) How many computers can be produced by the firm in a week if there are 300 units of labor?
Consumer and Producer Theory A small marketing agency has the following cost structure. Monthly rent on office space = *50,000 Monthly wages of each copywriter = 20,000 Here are the units of output produced per month according to the number of copywriters hired. No. of copywriters Units produced per month 4 5 6 1.0 1 7 2 4 01 6 7 8 9 10 30 55 75 90 100 108 Till what number of copywriters was the firm experiencing economies of scale? 114 118 116 117
Suppose Marcus produces chocolate with two inputs: factory and labour. The rent of the factory is $3,000 per week, and the wage of each worker is $2,000 per week. When Marcus produces 200 pounds of chocolate every week, he employs 2 workers. Calculate the fixed cost (FC), variable cost (VC), total cost (TC), average fixed cost (AFC), average variable cost (AVC), and average total cost (ATC) of producing 200 pounds of chocolate. The total cost of producing 201 pounds of chocolate is $7030. Calculate the marginal cost (MC) of producing the 201st pound of chocolate.
Describe the difference between a diminishing marginal product of labor and a negative marginalproduct of labor. Why would a profit-maximizing firm always choose to operate where the marginalproduct of labor is decreasing (but not negative)?
Please no written by hand solutions Belfast Company produces bucycles using labor (L) and capital (K). Its production function is given by the following expression: Q =min{ 125 L , 143 K} where Q is the output of bicycles. The prices of labor (PL), capital (PK), bicycle (P) and the cost (C) are the following: PL=1, PK=5, P=12 and C=2183 What is the profit maximizing amount of labor that Belfast Company should hire?
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. When the firm uses 120 units of labor, what is its marginal cost at this output?
The expansion path of a firm gives five different quantities of output such as 10,20,30,40 and 50 units; and the price of labor is $25 and the price of capital is $100 per unit. The table shows the long-run costs of the firm at given quantities of output. Q L K LTC( $) LAC( $) LMC ($) 10 64 20 3600 360 360 20 120 40 7000 350 340 30 200 58 10800 360 380 40 288 80 15200 380 440 50 440 90 20000 400 480 a. With the help of graph, analyze the properties of LAC and LMC b. Interpret and evaluate the numerical and graphical data and illustrate the relationship between LAC and LMC
A firm has the following production function: q = KL, where q is output, K is capital and L is labor. The price of a unit of capital is $1,000 and the price of a unit of labor is $500. The total cost includes the cost of capital and labor, as well as an additional $200 per unit of output for raw materials. The firm currently runs a single factory with 5 units of capital. Assume that capital is fixed in the short run. (a) How much does it cost to produce q units of output (in the short-run)? [The answer I expect is a particular function of q.] (b) Will the firm produce or shut down in the short run if the price of a unit of output is $300? Explain in at most one sentence.
Suppose the production function for high quality brandy is given by : Q = √KLWhere q is the output of brandy per week and L is labor hours per week ., in the short run K is fixed at 100, so the short run production function is Q = 10√La. If the capital rents for 10$ and the wage are 5$per hour ., write the short run total cost function. b. How much will the firm produce at a price of 20$ per bottles of brandy ?c. How many labor hours will be hired per week?