Microeconomics - Marginal Revenue Product

profileihatecollege
Home>Homework Answsers>Business & Finance homework help>Economics homework help

Sullivan's Custom Cabinets operate in a perfectly competitive market and employs labor and capital. Labor costs $30 a day. Machines cost $36 a day. Currently, Sullivan's has six machines and the marginal revenue product of capital is $30. Output sells at $5 per unit. Sullivan's hires you as a consultant and provides you with the following production function chart.

Workers Days – 1,2,3,4,5,6,7

Total Output – 9,17,24,30,35,39,42

 

 

  1. Explain, in your own words, the meaning of MRP.
  2. How is MRP computed?
  3. Using the data presented, in the short run, how many workers would you recommend Sullivan's hire per day to maximize profits?
  4. Explain how you arrived at this number.
    • 13 years ago
    • 10
    Report issue
    Answer(4)
    profile
    Research Master
     (Not rated)
     (Not rated)
    Chat

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      marginal_revenue.docx
    profile
    xoon
    4.1 (1k+)
    4.6 (119)
    Chat

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      sullivans_custom_cabinets.doc
    profile
    RSaleem
    4.7 (712)
    4.8 (26)
    Chat

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      economics-_786340205.docx
    profile
    Smart Study
    3.4 (425)
    4.0 (28)
    Chat

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      week_08_written_assignment_-_labor_to_maximize_profits.docx
    Bids(0)
    other Questions(10)