A firm uses as inputs labor and capital. In January, the price of the firm's output is

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A firm uses as inputs labor and capital. In January, the price of the firm's output is P = 1, the wage rate is W = 4, the price of capital is R = 2, the firm sells Q = 30 units of output, uses L = 5 units of labor, and uses K = 2 units of capital. In February, the price of the firm's output is P = 6, the wage rate is W = 5, the price of capital is R = 3, the firm sells Q = 31 units of output, uses L = 3 units of labor, and uses K = 7 units of capital. Only based on the information given here, which of the following is true?
(a) There is evidence that proves that the firm is no profit maximizing in January.
(b) There is evidence that proves that the firm is not profit maximizing in February.
(c) There is evidence that proves that the firm is profit maximizing in neither month.
(d) There is no evidence that proves that the firm is not profit maximizing.
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Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

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