Profit-maximizing behavior in perfectly competitive factor markets

Slytherthings, Inc. is a perfectly competitive firm producing lockets. It pays

$ 60

per unit for the

10

units of capital it uses, and the marginal product of the

10^{th}

unit of capital is

420

lockets. The firm can’t change its use of capital in the short run, but it can change its use of labor, and it can hire as much labor as it wants at a wage of

$ 30

. The firm’s production function is given in the table shown here:

Units of labor	Total output
$0$ ‍	$0$ ‍
$1$ ‍	$750$ ‍
$2$ ‍	$1420$ ‍
$3$ ‍	$1920$ ‍
$4$ ‍	$2270$ ‍
$5$ ‍	$2480$ ‍
$6$ ‍	$2580$ ‍
$7$ ‍	$2540$ ‍

How many units of labor should the firm hire to minimize costs and maximize profits?

Mikroekonomia - program rozszerzony

Kurs: Mikroekonomia - program rozszerzony > Rozdział 5

Zadanie