Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn

Exercise 4

In each of the folfour case's, MRP L and MRP C refer to the marginal revenue products of labor and capital, respectively, and P L and P C refer to their prices. Indicate in each case whether the conditions are consistent with maximum profits for the firm. If not, state which resource(s) should be used in larger amounts and which resource(s) should be used in smaller amounts. L05
a. MRP L = $8; P L = $4; MRP C = $8; P C = $4
b. MRP L = $10; P L = $12; MRP C = $14; P C = $9
c. MRP L = $6; P L = $6; MRP C = $12; P C = $12
d. MRP L = $22; P L = $26; MRP C = $16; P C = $19