Microeconomics 20th Edition by McConnell, Sean Flynn, Stanley Brue

Exercise 4

In each of the following four 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