ECN 104 Lecture Notes - Marginal Revenue Productivity Theory Of Wages, Marginal Revenue, Demand Curve

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Factor demand and marginal revenue product in a purely competitive firm. The table shows production and input cost data for a firm buying and selling competitively. The firm uses one variable input and has fixed costs of . Complete the table and then use the information to answer the fill-in questions. 7: the firm"s marginal factor cost is , for the first unit of input marginal revenue product is and is found by. 2 multiplying __________ and __________: the firm should hire the first unit of input since the __________ is greater than the __________, for the second unit of input the mfc is and the mrp is . The firm should hire the second unit of resource since the __________ is greater than the. __________: to maximize profits the firm should hire _____ units of input and obtain profits of , suppose the firm was using 4 units of input and was considering using one more unit.

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