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    Calculating optimal level of input required

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    Assume ZCorp has the following short run production function
    Q = 50X - 2X^2
    where X is the only variable input used by ZCorp to product its product, Q.

    Because ZCorp sells its product in a perfectly competitive market, it can sell all the Q it produces for $25. The current market price for input X is $100.

    How many units of X will ZCorp buy?

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    Solution Preview

    Q = 50X - 2X^2

    Marginal Product of X=MPx=dQ/dX=50-4X

    Marginal Revenue Product ...

    Solution Summary

    The solution describes the steps to calculate optimal level of input required.