Under pure competition the market price of an output is $3. The output schedule of a firm using input X is listed in the table below. If the price of input X is $12, how many units of input X will the firm employ to maximize profits?
A. 4
B. 5
C. 7
D. 9
C. 7
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If the cost of capital increased to 25%, would the firm invest in the printer?
a. Yes because the NPV>0 b. Yes because the NPV=0 c. Need information on the marginal benefits and costs d. No because the NPV<0
The J-curve summarizes the phenomenon that occurs when import spending initially falls after a depreciation of a country's currency and then import spending later rises
Indicate whether the statement is true or false
The table below shows the units of land and labor required to produce a unit of bread and cheese respectively in Country X. If Country X is a relatively land-abundant country, the opening up of free trade would cause the price of bread relative to cheese to 1 Unit of Bread1 Unit of CheeseLabor Input5 units20 unitsLand Input4 units10 units
A. initially rise but fall afterward. B. fall. C. stay the same. D. rise.
An externality is
A. the total cost to society of producing an additional unit of a good or service. B. the amount a consumer pays to consume an additional amount of a particular good. C. a cost or benefit resulting from some activity or transaction that is imposed or bestowed on parties outside the activity or transaction. D. a problem intrinsic to public goods: The good or service is so costly that its provision generally does not depend on whether or not any single person pays.