Victoria Corp. makes running shoes by employing a robotics technology that requires at most a few, but highly skilled, workers for monitoring and maintenance of the robots. Each robot costs $240,000. The table below shows the marginal product of capital (MPK) per month when the firm employs one worker versus when it employs two workers. Each pair of Victoria shoes sells for $150.

-Refer to the scenario above. If the firm decides to employ one worker, and the wage is $40,000 per month, the firm?s maximum profit is ________.
A) $10,000
B) $20,000
C) $30,000
D) $40,000

Question

Victoria Corp. makes running shoes by employing a robotics technology that requires at most a few, but highly skilled, workers for monitoring and maintenance of the robots. Each robot costs $240,000. The table below shows the marginal product of capital (MPK) per month when the firm employs one worker versus when it employs two workers. Each pair of Victoria shoes sells for $150.
 
-Refer to the scenario above. If the firm decides to employ one worker, and the wage is $40,000 per month, the firm?s maximum profit is ________.
A) $10,000 
B) $20,000 
C) $30,000 
D) $40,000

Quizplus · Accepted Answer

The Answer of Victoria Corp. makes running shoes by employing a robotics technology that requires at most a few, but highly skilled, workers for monitoring and maintenance of the robots. Each robot costs $240,000. The table below shows the marginal product of capital (MPK) per month when the firm employs one worker versus when it employs two workers. Each pair of Victoria shoes sells for $150.
 
-Refer to the scenario above. If the firm decides to employ one worker, and the wage is $40,000 per month, the firm?s maximum profit is ________.
A) $10,000 
B) $20,000 
C) $30,000 
D) $40,000