A firm employs two factors of production: A and B.The price of A is $6 and its marginal product at equilibrium is 2.The price of B is $24 and its marginal product at equilibrium is 8.The production function calls for twice as much A to be used as B.If the price of A drops to $5, then:
A) its marginal product will rise as a result.
B) the marginal product of B will fall below 6.
C) the production function will shift closer to an equal employment of the two inputs.
D) the marginal revenue product of A will fall below 2.
E) none of the above.
Correct Answer:
Verified
Q22: Use the following to answer questions :
Figure
Q23: Suppose the firm in the table above
Q24: Use the following to answer questions :
Table
Q25: Use the following to answer questions :
Figure
Q26: Wealth is measured as a:
A)stock.
B)random variable.
C)share of
Q28: Suppose the firm in the table above
Q29: The marginal revenue product is best described
Q30: In a fully employed market economy, how
Q31: To make the maximum amount of profits,
Q32: A monopolist will hire labor up to
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents