Refer to the given data. Assume that price of labor (PL=$9) and price of capital PC=$12). Profit maximizing combination of labor and capital this firm will hire is:

Expert Solution

We know that a profit maximizing firm will hire workers as long as those workers generate...

What would be the profit-maximizing price for the firm to charge?

Assume that a hospital is a profit maximizing firm and is a local monopoly. It accepts...

A profit-maximizing firm in a competitive market is able to sell its product for $9. At...

The following table depicts the price and cost structure of a profit-maximizing firm:

PumpkinPlus is a profit-maximizing firm that produces a carving tool using labor and materials according to...

A profit-maximizing firm should keep on hiring labor as long as the marginal revenue product of...

Imagine a profit-maximizing monopoly operating under the following conditions. The price which maximizes profit is $12....

Suppose a profit-maximizing firm can effectively engage in second-degree price discrimination and is the only firm...

A profit-maximizing firm is currently producing output, Q = 3 units and selling at a price...

Question

Group of answer choices

L=4 and C=4.

L=5 and C=4.

L=4 and C=5.

L=5 and C=5.

Any firm would chose that combination of labor and capital, that would minimize its cost of production.

Let the given information in the question formulized in the below table, which shows :

L = Labor Units , C = Capital Units

PL = Price of Labor, PC = Price of Capital

Labor Cost = Labor Units * Price of Labor

Capital Cost = Capital Units * Price of Capital

Toal Cost = Labor Cost + Capital Cost

From the above table we can see that with the given prices of labor and capital, L= 4 and C = 4 gives the least total cost of $84 as compared to other combinations. Thus firm would prefer to hire 4 units of capital and 4 units of labor, to maximize its profits.

Rahul Sunny answered 2 years ago

We know that a profit maximizing firm will hire workers as long as those workers generate enough revenue to cover their wages. Why might a firm decide to pay an efficiency wage to workers? You should provide at least 2 reasons.

Assume that a hospital is a profit maximizing firm and is a local monopoly. It accepts a mix of privately insured and public patients (i.e. patients who are in public insurance programs such as Medicare and Medicaid). The private sector faces a downward sloping demand curve, and the public sector faces a fixed regulated government price. Suppose government changes its policy to reduce the reimbursement (i.e. the government price) to hospitals. Use the economic model of price discrimination to show...

A profit-maximizing firm in a competitive market is able to sell its product for $9. At its current level of output, the firm's average total cost is $10. The firm's marginal cost is the same as its marginal revenue at its current output level of 20 units. The firm experiences a Select one: a. loss of more than $20. b. profit of more than $20. c. profit of exactly $20. d. loss of exactly $20.

The following table depicts the price and cost structure of a profit-maximizing firm:QuantityPrice per UnitTotal Cost0251012515225303255542590525135a.) What is the firm’s fixed cost?b.) What is the variable cost of producing two units of output?c.) What is the marginal cost of the second unit produced?d.) What is the firm’s total revenue from selling two units of output?e.) What is the marginal revenue from the second unit sold?f.) What is the firm’s profit-maximizing level of output?

PumpkinPlus is a profit-maximizing firm that produces a carving tool using labor and materials according to a production function for which both labor and materials are normal inputs. PumpkinPlus faces a downward-sloping demand curve for carving tools. Say the wage rate rises. What changes do you predict in the use of labor, the use of materials, the number of tools produced, the price per carving tool, and the profit earned by the firm in the long run? Explain your reasoning...

A profit-maximizing firm should keep on hiring labor as long as the marginal revenue product of labor is greater than the wage. True or False

Imagine a profit-maximizing monopoly operating under the following conditions. The price which maximizes profit is $12. The marginal revenue (MR) curve and marginal cost (MC) curve intersect where the quantity of output is 10 units and marginal cost is $6. The socially efficient quantity of production is 14 units. The demand curve and MC curves are linear. What is the size of the deadweight loss created by this monopolist? $4 $6 $12 $16

Suppose a profit-maximizing firm can effectively engage in second-degree price discrimination and is the only firm present in this market. The firm wishes to (and successfully does) impose a block tariff that consists of three separate blocks. The inverse market demand curve is given by P = a − bQ. The firm’s total cost curve is T C = f + cQ. The firm’s profit-maximizing total quantity sold?

A profit-maximizing firm is currently producing output, Q = 3 units and selling at a price of p = $10. What MUST be true about the firm's costs? A The firm's Average Variable Cost is less than $10. B The firm's Average Total Cost is less than $10. C The firm's Marginal Cost is equal to $10. D The firm's Average Fixed cost must be less than $10.

PL($)

PC($)

Labor Cost

Capital Cost

Total Cost ($)