Consider a competitive, price-taking firm that employs only one variable input, labor, to produce a product that sells for $14 per unit. The wage rate is $24 per unit of labor and total fixed costs are $500. Fill in the blanks in each column of this table as instructed by the questions below: a- The manager hires ________ units of labor in order to maximize profit. Atthis level of labor usage, ARP = _____________ which is ______________(greater, less) than MRP.b- The profit-maximizing level of output is ______ units because this is the lastlevel of output for which _____________ exceeds _____________, orequivalently, _____________ exceeds _____________ . A 10e_11_Chap_Student_Workbook.pdf - Adobe Acrobat Reader DC (64-bit)Archivo Edición Ver Firmar Ventana Ayuda/ 275.Columns 1–8 in your table should look like this:(1)(2)(3)(4)(5)(6)(7)(8)MarginalProductMarginalRevenueProductAverageRevenueProductUnits ofAverageProductMarginalCostProfit whenLaborOutputTFC = $500XXXXXXXXXX-50018811281123-41222012168101402-2683341419611.33158.621.71-964451115411.25157.52.183453811210.6148.4312258709.67135.384.801687613428.71121.948186863287.87110.18121909.641147.1199.55241801062-2-286.286.8XX12817:58w25°CG x 4) ENG11-03-2022近

a) Given the table, the maximum profit is when 8 units of labor are hired and 63 units of output are…

Answered: Consider a competitive, price-taking…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider a competitive, price-taking firm that employs only one variable input, labor, to produce a product that sells for $14 per unit. The wage rate is $24 per unit of labor and total fixed costs are $500. Fill in the blanks in each column of this table as instructed by the questions below:

a- The manager hires ________ units of labor in order to maximize profit. At

this level of labor usage, ARP = _____________ which is ______________

(greater, less) than MRP.

b- The profit-maximizing level of output is ______ units because this is the last

level of output for which _____________ exceeds _____________, or

equivalently, _____________ exceeds _____________ .

A 10e_11_Chap_Student_Workbook.pdf - Adobe Acrobat Reader DC (64-bit)
Archivo Edición Ver Firmar Ventana Ayuda
/ 27
5.
Columns 1–8 in your table should look like this:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Marginal
Product
Marginal
Revenue
Product
Average
Revenue
Product
Units of
Average
Product
Marginal
Cost
Profit when
Labor
Output
TFC = $500
XX
XX
XX
XX
XX
-500
1
8
8
112
8
112
3
-412
2
20
12
168
10
140
2
-268
3
34
14
196
11.33
158.62
1.71
-96
4
45
11
154
11.25
157.5
2.18
34
53
8
112
10.6
148.4
3
122
58
70
9.67
135.38
4.80
168
7
61
3
42
8.71
121.94
8
186
8
63
28
7.87
110.18
12
190
9.
64
1
14
7.11
99.55
24
180
10
62
-2
-28
6.2
86.8
XX
128
17:58
w
25°C
G x 4) ENG
11-03-2022
近

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