Suppose Firm A has a budget of P1.5 million pesos in outsourcing inputs, labor and machines, that would lend support in its 1-year operation. Suppose further that the cost of labor for 1 year is P150,000 and for a machine is P200,000. If it decides to hire 6 laborers, how many machines would it accept? Analysis [7 pages] Based on the above activity: 1. How would a firm decide on what combination of inputs it would hire? 2. What is/are the basis of the firm in selecting the number of its inputs? 3. Do you think the above combination of inputs would let Firm A to gain a maximum profit? Why or why not?

Suppose Firm A has a budget of P1.5 million pesos in outsourcing inputs, labor and machines, that would lend support in its 1-year operation. Suppose further that the cost of labor for 1 year is P150,000 and for a machine is P200,000. If it decides to hire 6 laborers, how many machines would it accept? Analysis [7 pages] Based on the above activity: 1. How would a firm decide on what combination of inputs it would hire? 2. What is/are the basis of the firm in selecting the number of its inputs? 3. Do you think the above combination of inputs would let Firm A to gain a maximum profit? Why or why not?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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