Profits
Not what you're looking for?
17. Using the following table, consider the following: This firm rents its capital for $75 per hour. Its output (Q) is in terms of output per hour. The firm pays its employees $15 per hour.
Capital Labor Output Marginal Value of the
Product of Marginal Product
Capital of Capital
K L Q MP of K VMP of K
0 20 0
1 20 50 50 $100
2 20 150 100 200
3 20 300
4 20 400
5 20 450
6 20 475
7 20 475
8 20 450
9 20 400
10 20 300
11 20 150
a. Complete the table for the MP or K and the Value of the Marginal Product of K.
b. At what point does the firm produce (how many pieces of capital does it rent)?
c. What profit does this efficient firm make?
See attached file for full problem description.
Purchase this Solution
Solution Summary
Profits are examined in this post.
Solution Preview
See the attached file.
a. Complete the table for the MP or K and the Value of the Marginal Product of K.
Please see the EXCEL for calculation.
MPK= dQ/dK
VMPK = MPK * 20
where 20 is given by ...
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.