A perfectly competitive firm in the factor and product markets sells its output for $1 and pays factors PL = $9 and Pc = $12. What is the profit-maximizing combination of labor (L) and capital (C) for the firm?
What will be an ideal response?
The firm would employ 5 units of labor and 3 units of capital to maximize profit.
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Consider the relationship between a kinked demand curve and the corresponding marginal revenue curve. Below the point where the kinked demand curve has its characteristic kink, the marginal revenue curve is
a. positively sloped b. a horizontal line c. a vertical line d. discontinuous e. nonexistent because of the kink
The U.S. balance of payments status may improve when
A. the inflation rate increases in the United States relative to other countries. B. political instability in other countries increases. C. the American government increases its spending on foreign aid. D. the world demand for U.S. products falls.
Firms are the producing units of the economy.
Answer the following statement true (T) or false (F)
Should the government run the health care system?
What will be an ideal response?