Suppose the productivity of capital and labor are as shown in the table below. The output of these resources sells in a purelycompetitive market for $1 per unit. Both capital and labor are hired under purely competitive conditions at $3 and $1, respectively.Units ofMP ofUnits ofMP ofCapitalСapitalLaborLabor241111219218831574466.317710.58COLOCoCO Instructions: Enter your answers as a whole number.a. What is the least-cost combination of labor and capital the firm should employ in producing 80 units of output?Labor =Capital :b. What is the profit-maximizing combination of labor and capital the firm should use?LaborCapital :What is the resulting level of output?unitsWhat is the economic profit?Is this the least costly way of producing the profit-maximizing output?Yes, this is the least costly way.

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a. What is the least-cost combination of labor and capital the firm should employ in producing 80 units of output? Labor = Capital b. What is the profit-maximizing combination of labor and capital the firm should use? Labor = Capital = What is the resulting level of output? units What is the economic profit? Is this the least costly way of producing the profit-maximizing output? Yes, this is the least costly way.

a. What is the least-cost combination of labor and capital the firm should employ in producing 80 units of output? Labor = Capital b. What is the profit-maximizing combination of labor and capital the firm should use? Labor = Capital = What is the resulting level of output? units What is the economic profit? Is this the least costly way of producing the profit-maximizing output? Yes, this is the least costly way.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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