PROFIT-MAXIMIZING INPUT USAGE

Consider a
price-taking firm that has total fixed cost of $50 and faces a
market-determined price of $2 per unit for its output. The wage rate is $10 per
unit of labor, the only variable input. Using the following table, answer the
questions below.

(1).

(2)

(3)

(4)

(5)

(6)

Units of
labor

Output

Marginal
product

Marginal
revenue product

Marginal
cost

Profit

1

5

_______

_______

_______

_______

2

15

_______

_______

_______

_______

3

30

_______

_______

_______

_______

4

50

_______

_______

_______

_______

5

65

_______

_______

_______

_______

6

77

_______

_______

_______

_______

7

86

_______

_______

_______

_______

8

94

_______

_______

_______

_______

9

98

_______

_______

_______

_______

10

96

_______

_______

_______

_______

a. Fill in the
blanks in column 3 of the table by computing the marginal product of labor for
each level of labor usage.
b. Fill in the
blanks in column 4 of the table by computing the marginal revenue product for
each level of labor usage.
c. How much
labor should the manager hire in order to maximize profit? Why?
d. Fill in the
blanks in column 5 of the table by computing marginal cost.
e. How many
units of output should the manager produce in order to maximize profit? Why?
f. Fill in the
blanks in column 6 with the profit earned at each level of labor usage.
g. Do your
answers to partscandemaximize profit? Does it matter
whether the manager chooses labor usage or chooses output in order to maximize
profit? Why?
h. How much
labor should the manager hire when the wage rate is $20? How much profit is
earned? Is marginal product greater or less than average product at this level
of labor usage? Why does it matter?

Consider a
price-taking firm that has total fixed cost of $50 and faces a
market-determined price of $2 per unit for its output. The wage rate is $10 per
unit of labor, the only variable input. Using the following table, answer the
questions below.

(1).

(2)

(3)

(4)

(5)

(6)

Units of
labor

Output

Marginal
product

Marginal
revenue product

Marginal
cost

Profit

1

5

_______

_______

_______

_______

2

15

_______

_______

_______

_______

3

30

_______

_______

_______

_______

4

50

_______

_______

_______

_______

5

65

_______

_______

_______

_______

6

77

_______

_______

_______

_______

7

86

_______

_______

_______

_______

8

94

_______

_______

_______

_______

9

98

_______

_______

_______

_______

10

96

_______

_______

_______

_______

a. Fill in the
blanks in column 3 of the table by computing the marginal product of labor for
each level of labor usage.
b. Fill in the
blanks in column 4 of the table by computing the marginal revenue product for
each level of labor usage.
c. How much
labor should the manager hire in order to maximize profit? Why?
d. Fill in the
blanks in column 5 of the table by computing marginal cost.
e. How many
units of output should the manager produce in order to maximize profit? Why?
f. Fill in the
blanks in column 6 with the profit earned at each level of labor usage.
g. Do your
answers to partscandemaximize profit? Does it matter
whether the manager chooses labor usage or chooses output in order to maximize
profit? Why?
h. How much
labor should the manager hire when the wage rate is $20? How much profit is
earned? Is marginal product greater or less than average product at this level
of labor usage? Why does it matter?

Consider a
price-taking firm that has total fixed cost of $50 and faces a
market-determined price of $2 per unit for its output. The wage rate is $10 per
unit of labor, the only variable input. Using the following table, answer the
questions below.

(1).

(2)

(3)

(4)

(5)

(6)

Units of
labor

Output

Marginal
product

Marginal
revenue product

Marginal
cost

Profit

1

5

_______

_______

_______

_______

2

15

_______

_______

_______

_______

3

30

_______

_______

_______

_______

4

50

_______

_______

_______

_______

5

65

_______

_______

_______

_______

6

77

_______

_______

_______

_______

7

86

_______

_______

_______

_______

8

94

_______

_______

_______

_______

9

98

_______

_______

_______

_______

10

96

_______

_______

_______

_______

a. Fill in the
blanks in column 3 of the table by computing the marginal product of labor for
each level of labor usage.
b. Fill in the
blanks in column 4 of the table by computing the marginal revenue product for
each level of labor usage.
c. How much
labor should the manager hire in order to maximize profit? Why?
d. Fill in the
blanks in column 5 of the table by computing marginal cost.
e. How many
units of output should the manager produce in order to maximize profit? Why?
f. Fill in the
blanks in column 6 with the profit earned at each level of labor usage.
g. Do your
answers to partscandemaximize profit? Does it matter
whether the manager chooses labor usage or chooses output in order to maximize
profit? Why?
h. How much
labor should the manager hire when the wage rate is $20? How much profit is
earned? Is marginal product greater or less than average product at this level
of labor usage? Why does it matter?

Consider a
price-taking firm that has total fixed cost of $50 and faces a
market-determined price of $2 per unit for its output. The wage rate is $10 per
unit of labor, the only variable input. Using the following table, answer the
questions below.





(1).

(2)

(3)

(4)

(5)

(6)

Units of
labor


Output

Marginal
product


Marginal
revenue product


Marginal
cost


Profit

1

5

_______

_______

_______

_______

2

15

_______

_______

_______

_______

3

30

_______

_______

_______

_______

4

50

_______

_______

_______

_______

5

65

_______

_______

_______

_______

6

77

_______

_______

_______

_______

7

86

_______

_______

_______

_______

8

94

_______

_______

_______

_______

9

98

_______

_______

_______

_______

10

96

_______

_______

_______

_______

a. Fill in the
blanks in column 3 of the table by computing the marginal product of labor for
each level of labor usage.
b. Fill in the
blanks in column 4 of the table by computing the marginal revenue product for
each level of labor usage.
c. How much
labor should the manager hire in order to maximize profit? Why?
d. Fill in the
blanks in column 5 of the table by computing marginal cost.
e. How many
units of output should the manager produce in order to maximize profit? Why?
f. Fill in the
blanks in column 6 with the profit earned at each level of labor usage.
g. Do your
answers to partscandemaximize profit? Does it matter
whether the manager chooses labor usage or chooses output in order to maximize
profit? Why?
h. How much
labor should the manager hire when the wage rate is $20? How much profit is
earned? Is marginal product greater or less than average product at this level
of labor usage? Why does it matter?






















Answers

Related Questions

Humanities : Quantitative Analysis...

Part 1Quantitative Analysis Responses should directly address the question and be discerning about when the DB is asking for a more objective (researc...

Humanities : Case Study 10: Government as Catalys...

 link to case study 10 http://w2i.com/images/user/files/618.pdfDescribe examples from the case of the essential dimensions of collaborative manageme...

Mathematics : Need help for open book test for El...

I have an open book test for Elementary Statistics class, I need someone who is mastering "really good" the material for this subject please, and kno...

Humanities : affirmative action effectiveness and...

The effectiveness of affirmative action – and the fairness of it – was the subject of this week’s reading. For this week’s written assignment,...

Humanities : Who Brought Bernadine Healy Down?...

Identify and discuss the public service culture present in the case and explain why Wise argue that public service motivation is found more in the gov...

Business Finance : International Business Managem...

100% Original and NO PLAGIARISM - APA Format with 1 reference to each question - This will be turned into Turnitin.com6) Geert Hofstede is well-known...

Business Finance : Martha Stewart case...

We talked about the Martha Stewart case in class in Week 1. Criminal sanctions and her jail sentence were imposed upon her for obstructing justice in...

Humanities : Philosophy Ethnic Discussion 8...

Analyze the case according to the concepts of the Divine Command Theory. For example, does the morality of the situation depend on something a supreme...

Humanities : Philosophy Written Case Analysis 7...

Compose an 800-word written analysis in which you identify the moral issue(s) and the parties involved. Take a balanced moral position offering a reco...

Business Finance : need 10 pages proposal...

ilovepdf_merged (2).pdf I need 10 pages proposal for this summary down here, pleas write it the same style and the same sections such as the example...

Business Finance : Statistics for Managers...

Many people do not “like” or “trust” single point estimates for things they need measured.  Looking back at the data examples you have provid...

Writing : writing need help please...

Leadership Traits/Qualities   Write a response to the following prompt: Describe at least three ways in which a leader can fail and how those fai...

Humanities : 750 Word Paper Needed...

It has to be a 750-1,000-word essay that analyzes the rhetorical situation of a public document. This public document is the Centers for Disease Co...

Science : Help with astronomy...

Today we know that Copernicus was, in his most basic premise, right in his view of the Universe. Our Solar System centers on the Sun, rather than on t...

Mathematics : Business statistics Value of t and...

The U.S. Dairy Industry wants to estimate the mean yearly milk consumption. A sample of 13 people reveals the mean yearly consumption to be 58 gallons...

Writing : Must Follow Writting Instructions & Ser...

At the end of the 2012 report (Below link i.e. verizon web), you'll see a set of recommendations. Your task is to select one recommendation from...

Business Finance : Marketing in a Global Economy...

Read the article: "Airbnb and the Unstoppable Rise of the Share Economy". A recent trend in the consumer marketplace is the ability for a consumer to...

Business Finance : Marketing Channels...

Analyze the challenges that organizations face in the effective transition between selling products using the traditional brick and mortar marketing c...

Business Finance : Optimal Order Quantities...

In your studies this week, you found that the optimal order quantity is achieved at the point at which inventory setup cost per unit of time equals in...

Business Finance : Supply Chain Forecasting...

Discuss how forecasting effects the supply chain of an automobile manufacturer. Consider especially the forecasting and supply chains involved in manu...

Business Finance : Evaluate the strategic managem...

Evaluate the strategic management for 2 companies (Saudi Arabian Airlines – Emirates Airlines) and compare between themConsider the following poi...

Science : please help with discussion...

Health and medical technologies available to both health care providers and administrators continue to advance rapidly. Choose a recent medical techno...

Humanities : According to Black Elk, 500 innocent...

Answer with no less than 200 on why you Agree.According to Black Elk, 500 innocent men, women, and children were rounded up, disarmed, and butcher...

Humanities : Why you Agree with no less than 200...

Answer on Why you Agree with no less than 200 wordsMy take on the story of T. Hall was that he /she was placed under scrutiny for dressing as both gen...

If you didn't find the right answer

Ask Your Questions, We'll notify you once someone answers it