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The Table Below Contains Information About a Firm's Marginal Revenue

Question 58

Multiple Choice

The table below contains information about a firm's marginal revenue product of capital. $The table below contains information about a firm's marginal revenue product of capital. Suppose the rental price of capital is $425,000. How many units should the firm hire to maximize profit? A) The firm should hire 3,000 units or, if fractional units are possible, less than 4,000 but more than 3,000 units. B) The firm should hire 4,000 units or, if fractional units are possible, less than 5,000 but more than 4,000 units. C) The firm should hire 5,000 units. D) The firm should hire 6,000 units or, if fractional units are possible, less than 7,000 but more than 6,000 units. E) The firm should hire 7,000 units or, if fractional units are possible, less than 6,000 but more than 7,000 units.$ Suppose the rental price of capital is $425,000. How many units should the firm hire to maximize profit?

A) The firm should hire 3,000 units or, if fractional units are possible, less than 4,000 but more than 3,000 units.
B) The firm should hire 4,000 units or, if fractional units are possible, less than 5,000 but more than 4,000 units.
C) The firm should hire 5,000 units.
D) The firm should hire 6,000 units or, if fractional units are possible, less than 7,000 but more than 6,000 units.
E) The firm should hire 7,000 units or, if fractional units are possible, less than 6,000 but more than 7,000 units.

Correct Answer: