When the average product of labor is the same as the marginal product of labor, how will marginal cost compare with average variable cost?
Answer to relevant QuestionsA firm purchases capital and labor in competitive markets at prices of r = 6 and w = 4, respectively. With the firm’s current input mix, the marginal product of capital is 12 and the marginal product of labor is 18. Is ...A firm with the production functionQ (K, L) = 2L√KLis currently utilizing 8 units of labor and 2 units of capital. If this is the optimal input mix, and if total costs are equal to 16, what are the prices of capital and ...Suppose all firms in a competitive industry are operating at output level for which price is equal to long- run marginal cost. True or false: This industry is necessarily in long- run equilibrium.You are the owner/ manager of a small competitive firm that manufactures house paints. You and all your 1000 competitors have total cost curves given by TC = 8 + 2Q + 2Q2,And the industry is in long- run equilibrium. Now you ...A firm in a competitive industry has a total cost function of TC = 0.2Q2 - 5Q + 30, whose corresponding marginal cost curve is MC = 0.4Q - 5. If the firm faces a price of 6, what quantity should it sell? What profit does the ...
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