Assume that a business firm finds that its profit is greatest when it produces $42 worth of product A. Suppose also that eac the three techniques shown in the table below will produce the desired output. Resource Units Required Price per Unit of Resource Resource Technique 1 Technique 2 Technique 3 $2 5 2 3 Labor Land 4 2 4 Capital 2 2 4 Entrepreneurial ability 2 4 2 a. With the resource prices shown, which technique will the firm choose? Technique 2 # Why? This technique represents the least-cost combination. 2 5 4

Assume that a business firm finds that its profit is greatest when it produces $42 worth of product A. Suppose also that eac the three techniques shown in the table below will produce the desired output. Resource Units Required Price per Unit of Resource Resource Technique 1 Technique 2 Technique 3 $2 5 2 3 Labor Land 4 2 4 Capital 2 2 4 Entrepreneurial ability 2 4 2 a. With the resource prices shown, which technique will the firm choose? Technique 2 # Why? This technique represents the least-cost combination. 2 5 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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