A firm uses labour to produce a certain good. If units of labour are used by the firm, the output of the good equals . Each unit of the good sells at a price of 1. Let denote the price of each unit of labour. We must have . Assume that the firm hires labour to maximize profits.
Assume that . Then the profits of the firm equal
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A firm uses labour to produce a certain good. If x units of labour are used by the firm, the output of the good equals f(x) = 20x - x². Each unit of the good sells at a price of 1. Let w denote the price of each unit of labour. We must have x ≥ 0. Assume that the firm hires labour to maximize profits. Assume that w = 16. Then the profits of the firm equal (A) 2 (B) 36 (C) 4 (D) None of the above
Also written as: A firm uses labour to produce a certain good. If x units of labour are used by the firm, the output of the good equals f(x) = 20x - x^2. Each unit of the good sells at a price of 1. Let w denote the price of each unit of labour. We must have x >= 0. Assume that the firm hires labour to maximize profits. Assume that w = 16. Then the profits of the firm equal
Factor markets and income distribution has come up 55 times in 6 exams since 2006.
This question is on Derived demand and marginal revenue product, part of Factor markets and income distribution in Microeconomics.
Why firms demand inputs: the value of what the last unit adds to output or revenue.
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Question from the JNU SSS 2012 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.