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Author Question: If the price of a unit of output for a perfectly competitive firm is $5 and the profit-maximizing ... (Read 84 times)

Haya94

  • Hero Member
  • *****
  • Posts: 558
on: Apr 19, 2019

Question 1

A firm is currently hiring capital and labor so that 
MPL/
PL < 
MPK/
PK, if the firm wishes to maximize profits it should hire


◦ less labor and less capital.
◦ more capital and more labor.
◦ more labor and less capital.
◦ less labor and more capital.

Question 2

If the price of a unit of output for a perfectly competitive firm is $5 and the profit-maximizing condition is met, then 
MPL/
PL = 
MPK/
PK = 
MPA/
PA will be equal to


◦ $5.
◦ $1.67.
◦ $0.20.
◦ $0.05.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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spencer.martell

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  • Posts: 342
Reply #1 on: Apr 19, 2019

Answer 1

less labor and more capital.

Answer 2

$0.20.


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