LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 3, Problem 1RQ
To determine
Explain the strategy of a firm to maximize his or her profit.
Expert Solution & Answer
Explanation of Solution
A profit maximizing firm will hire the employers at the point where the wage of the labor is equal to the value of marginal product. This is because the marginal product is the
This same idea is used by the firm in his output setting. A firm will set its level of output at the point where output price (MR) equal to its marginal cost.
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MC
The diagram shows a pharmaceutical firm's demand
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for which the firm holds a 20-year patent on its
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Assume this pharmaceutical firm charges a single price
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OA. areas J+K.
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OC. areas E+F+I+H+G.
D. - it is not possible to determine with the informatio
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(...)
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P2
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$22
40,000
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$20
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$18
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$14
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Which of the following is the best example of perfect price discrimination?
A. Universities give entry scholarships to poorer students.
B. Students pay lower prices at the local theatre.
○ C. A hotel charges for its rooms according to the number of days left before the check-in date.
○ D. People who collect the mail coupons get discounts at the local food store.
○ E. An airline offers a discount to students.
Knowledge Booster
Similar questions
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