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nakungth nakungth
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6 years ago
Use the data in the table below to answer the following questions about a firm.

   Units of   Units of   Total   Marginal   Output
   Input X   Input Y   Product   Product of X   Price

      0   25   0   $10   
   1   25   2   10
   2   25   7   10
   3   25   14   10
   4   25   20   10
   5   25   23   10
   6   25   24   10

a.   Complete the table by calculating the marginal product of input X.
b.   Compute the marginal revenue produce of input X.
c.   If the price of input X were $30 per unit, how many units should the firm use per unit of time to maximize profit?  Explain why profit is maximized.
Textbook 
Microeconomics

Microeconomics


Edition: 8th
Author:
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Replies
wrote...
6 years ago
a.       
The MPX values are: 2, 5, 7, 6, 3, 1

b.       
MRPX = MPX ∙ MRQ = 20, 50, 70, 60, 30, 10

c.       
Equate ME to MRP to get 5 units of input.  Profit is maximized because the marginal expenditure for the last unit of X hired just equals the marginal revenue generated.  Also MRPX is decreasing as more X is hired; this is associated with a maximum.
nakungth Author
wrote...
6 years ago
Thank you!
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