Question

Marginal Revenue Product and Demand Units of Variable Factor Total Products 0 0 1 20 2...

Marginal Revenue Product and Demand

Units of Variable Factor

Total Products

0

0

1

20

2

50

3

90

4

120

5

140

6

150

7

150

8

140

Reference: Ref 12-1

(Exhibit: Marginal Revenue Product and Demand) If the product price is $2 per unit and the price of the factor of production is $1080 per unit, the profit-maximizing quantity of the factor is _______ units.

a. 6

b. 2

c. 0

d. 4

Homework Answers

Answer #1
Units of variable factors Total product Marginal product Marginal revenue of product
0 0 --- -----
1 20 20 40
2 50 30 60
3 90 40 80
4 120 30 60
5 140 20 40
6 150 10 20
7 150 0 0
8 140 -10 -20

Marginal product =(change in total product / change in variable input)

Marginal revenue product = Marginal product * Price.

Note: Price = MR becasue price is same at each level of output.

The Marginal revenue product of each level of variable input is lower than the price of factor of production. It implies that, it is not benfeficial for a firm to hire even a single unit of fatcor.

Hence, the profit maximizing quantity of factor is 0 units.

Answer: Option (C)

Note: Profit maximizing quantity of factor occurs at the following point.

Marginal revenue product = Price of factor.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Output Total cost Marginal cost Quantity demanded Price Marginal revenue Profit 0 $   50 XXXX 0 $60...
Output Total cost Marginal cost Quantity demanded Price Marginal revenue Profit 0 $   50 XXXX 0 $60 XXXXX $ 1 80 $    1 55 $ 2 120 2 50 3 150 3 45 4 170 4 40 5 185 5 35 6 205 6 30 7 235 7 25 8 275 8 20 9 325 9 15 10 385 10 10 Assume that the short-run cost and demand data given in the table below confronts a monopolistic competitor selling a...
Exhibit 21-19 Quantity Sold Total Revenue Price (units) Total Cost Marginal Costs Marginal Revenue $10 10...
Exhibit 21-19 Quantity Sold Total Revenue Price (units) Total Cost Marginal Costs Marginal Revenue $10 10 $80 -- 100 -- 9 20 100 2 180 80 8 30 130 3 240 60 7 40 170 4 280 40 6 50 230 6 300 20 5 60 300 7 300 0 4 70 380 8 280 -20 Refer to Exhibit 21-19. Fill in the missing values. Assume this is a single-price monopolist who is seeking to maximize profits. How many units...
Price Quantity Demanded Total Fixed Cost Total Variable Cost Total Revenue Total Cost Marginal Revenue Marginal...
Price Quantity Demanded Total Fixed Cost Total Variable Cost Total Revenue Total Cost Marginal Revenue Marginal Cost $50 0 $8 $0 (C) (H)   45 1 8 20 (D) (I) (L) (R)   40 2 (A) 30 (E) (J) (M) (S)   35 3 8 55 105 63 (N) (T)   30 4 8 (B) (F) 93 (P) (U)   25 5 8 125 (G) (K) (Q) (V) Refer to Exhibit 24-4.  What dollar amounts go in blanks (P), (Q), (R), and (S), respectively? Refer to...
COSTS REVENUES Quantity Produced Total Cost Marginal Cost Quantity Demanded Price Total Revenue Marginal Revenue 0...
COSTS REVENUES Quantity Produced Total Cost Marginal Cost Quantity Demanded Price Total Revenue Marginal Revenue 0 $0 -- 0 $80 0 -- 1 $50 50 1 $80 80 80 2 $102 52 2 $80 160 80 3 $157 55 3 $80 240 80 4 $217 60 4 $80 320 80 5 $285 68 5 $80 400 80 6 $365 80 6 $80 480 80 7 $465 97 7 $80 560 80 8 $585 120 8 $80 640 80 b) What...
Use the demand schedule below to calculate total revenue and marginal revenue at each quantity. Explain...
Use the demand schedule below to calculate total revenue and marginal revenue at each quantity. Explain why the marginal revenue of the fourth unit of output is $3.50, even though its price is $5. Price (P) Quantity Demanded (Q) Price (P) Quantity Demanded (Q) $7.00 0 $4.50 5 6.50 1 4.00 6 6.00 2 3.50 7 5.50 3 3.00 8 5.00 4 2.50 9
16. Exhibit 22-2 (1) (2) (3) (4) (5) Variable Input Total Variable Cost Total Fixed Cost...
16. Exhibit 22-2 (1) (2) (3) (4) (5) Variable Input Total Variable Cost Total Fixed Cost Output Marginal Cost 1 $30 $100 20 2 $60 $100 50 (A) 3 $90 $100 90 (B) 4 $120 $100 120 (C) 5 $150 $100 140 (D) Refer to Exhibit 22-2. Diminishing marginal returns set in with the addition of which unit of the variable input? a. the first b. the third c. the fourth d. the fifth e. the second
Total Product Total Fixed Cost Total Variable Cost 0 $150 $ 0 1 150 50 2...
Total Product Total Fixed Cost Total Variable Cost 0 $150 $ 0 1 150 50 2 150 75 3 150 105 4 150 145 5 150 200 6 150 270 7 150 360 8 150 475 9 150 620 10 150 800 The first table shows cost data for a single firm. Now suppose that there are 600 identical firms in this industry, each with the same cost data. Suppose, too, that the demand curve for this industry is as...
In the short run, the greater the level of output, the Lower the total variable cost....
In the short run, the greater the level of output, the Lower the total variable cost. Greater the total variable cost. Greater the average fixed cost. Lower the total fixed cost. Greater the total fixed cost. The question below (24) is based on the following demand schedule for a monopolist:             ______________________________________________________________                P ($)             Q (units)                      TR ($)              MR ($)                  (2)                       (3) = (2)              (4) ______________________________________________________________     160                  1     150                  2                 140                 ...
Price Quantity Demanded Total Fixed Cost Total Variable Cost Total Revenue Total Cost Marginal Revenue Marginal...
Price Quantity Demanded Total Fixed Cost Total Variable Cost Total Revenue Total Cost Marginal Revenue Marginal Cost $50 0 $8 $0 (C) (H)   45 1 8 20 (D) (I) (L) (R)   40 2 (A) 30 (E) (J) (M) (S)   35 3 8 55 105 63 (N) (T)   30 4 8 (B) (F) 93 (P) (U)   25 5 8 125 (G) (K) (Q) (V) The profit-maximizing single-price monopolist will produce _____ units.
Total Product Total Fixed Cost Total Variable Cost 0 $150 $   0 1 150 50 2...
Total Product Total Fixed Cost Total Variable Cost 0 $150 $   0 1 150 50 2 150 75 3 150 105 4 150 145 5 150 200 6 150 270 7 150 360 8 150 475 9 150 620 10 150 800 Based on the cost data given in the accompanying table, which of the price-quantity tables correctly represents the firm's short-run supply schedule? (a) (b) (c) (d) P Qs P Qs P Qs P Qs $20 1 $20 0...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT