Essay
Assume that a firm finds that its profits will be maximized (or losses minimized) when it produces $50 worth of product X.Each of these techniques shown in the following table will produce exactly $50 worth of X. 
(a) Which method is most efficient? Why?
(b) Given the above prices, will the firm adopt a new method, which involves 2 units of land, 2 of labour, 4 of capital, and 8 of entrepreneurial ability?
(c) Suppose the price of labour falls to $1 without any other prices changing.Which of the methods will the firm now choose? Why?
Correct Answer:
Verified
(a) Method #2 is most efficient because ...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q7: Provide examples of prominent Canadian corporations and
Q8: List nine characteristics of the market system.
Q13: Describe the three major virtues of a
Q19: Explain the two different motives that firms
Q20: Assume that a firm finds that its
Q22: Explain the term "laissez faire capitalism."
Q27: Assume that a firm can produce product
Q28: How can technological advance result in creative
Q31: List and describe the three main categories
Q57: What conditions are necessary for economic competition