Chapter 7: Problem 34
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
Chapter 7: Problem 34
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
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If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect the long-run average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?
A firm is considering an investment that will earn a 6\(\%\) rate of return. If it were to borrow the money, it would have to pay 8\(\%\) interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment? Show your work.
A firm had sales revenue of \(\$ 1\) million last year. It spent \(\$ 600,00\) on labor, \(\$ 150,000\) on capital and \(\$ 200,000\) on materials. What was the firm's accounting profit?
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