Firm is currently producing their profit maximizing quantity

Assignment Help Business Economics

Reference no: EM131000500

A firm is currently producing their profit maximizing quantity of 600 units of output using 150 hours of labor and 50 hours of capital. The marginal product of labor is 10 units of output per hour and the marginal product of capital is 30 units of output per hour.

a. If the wage rate for labor is $5 per hour and the rental rate for capital is $10 per hour what is the firm’s total cost given their current allocation of capital and labor? Be sure to incorporate this information into your graph in part b.

b. Determine whether the firm is profit maximizing given their allocation of capital and labor. Make any necessary recommendations to the firm if their allocation of capital and labor should be altered. You must include a well labeled diagram to support your conclusion.

Reference no: EM131000500

Questions Cloud

Labor contract provides for a first-year wage : A labor contract provides for a first-year wage of $15.00 per hour and specified that the real wage will rise by 5 percent in the second year of the contract and by 7.5 percent in the third year. The CPI is 1.00 in the first year, 1.02 in the second ..

What should be the radius of curvature : A plastic plano-convex lens of refactive index 1.46 is placed above the dial of a watch at a distance of 1 cm to serve as its cover. If we need a magnification of 4, what should be the radius of curvature?

Period of supernormal growth : Now assume that TTC's period of supernormal growth is to last another 5 years rather than 2 years. How would this affect its price, dividend yield, and capital gains yield? Answer in words only.

Characteristic of civil law : Which of the following is a characteristic of civil law?

Firm is currently producing their profit maximizing quantity : A firm is currently producing their profit maximizing quantity of 600 units of output using 150 hours of labor and 50 hours of capital. The marginal product of labor is 10 units of output per hour and the marginal product of capital is 30 units of ou..

What rate in l/min and gal/hr should the liquid be pumped : The steel is 1.38m wide and is conveyed down the manufacturing line at 1.5m/s. The steel passes under nozzles that evenly and completely coat the steel. The desired application rate of anti-corrosion liquid is 0.010L/m^2. At what rate in L/min and..

Discuss the ethical dilemma moncrief faces in determining : Discuss the ethical dilemma Moncrief faces in determining whether or not the additional units should be purchased.

The cash flow associated with a stripper : The cash flow associated with a stripper oil well is expected to be $3,000 in month one, $2,950 in month two, and amounts decreasing by $50 each month through year five. What is the cash flow in the last month of year 5? At an interest rate of 1% per..

Quality of a store brand versus a name brand : New start-up in growing and emerging market (think software app development, etc) Which of the two do you believe has a better opportunity to provide innovative products, processes, and ideas? Why?

User Account

All Pages