A profit-maximizing competitive firm uses just one input, x. Its production function is q = 2x2, Marginalproduct MP is x12. The price of output is $16 and the factor price is $8. The amount of the factor that the firmdemands is24O None of the above16464

A firm will maximise its profit where price of an input is equal to value of marginal product

A profit-maximizing competitive firm uses just one input, x. Its production function is q 2x2, Marginal product MP is x2. The price of output is $16 and the factor price is $8. The amount of the factor that demands is O 24 O None of the above O16 O 64

A profit-maximizing competitive firm uses just one input, x. Its production function is q 2x2, Marginal product MP is x2. The price of output is $16 and the factor price is $8. The amount of the factor that demands is O 24 O None of the above O16 O 64

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

A profit-maximizing competitive firm uses just one input, x. Its production function is q = 2x2, Marginal
product MP is x12. The price of output is $16 and the factor price is $8. The amount of the factor that the firm
demands is
24
O None of the above
16
4
64

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