The Table Below Contains Information About a Firm's Marginal Revenue

question 18

Multiple Choice

The table below contains information about a firm's marginal revenue product of capital. Suppose the rental price of capital is $425,000. How many units should the firm hire to maximize profit?

• A) The firm should hire 3,000 units or, if fractional units are possible, less than 4,000 but more than 3,000 units.
• B) The firm should hire 4,000 units or, if fractional units are possible, less than 5,000 but more than 4,000 units.
• C) The firm should hire 5,000 units.
• D) The firm should hire 6,000 units or, if fractional units are possible, less than 7,000 but more than 6,000 units.
• E) The firm should hire 7,000 units or, if fractional units are possible, less than 6,000 but more than 7,000 units.

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Definitions:

Fibroblasts

Cells that produce collagen and other fibers, playing a critical role in wound healing and maintaining the structural integrity of connective tissues.

Collagen

A major structural protein found in skin, bone, tendons, and other connective tissues, providing strength and elasticity.

Capillaries

The smallest blood vessels in the body, where the exchange of water, oxygen, carbon dioxide, and many other nutrient and waste substances occurs between blood and surrounding tissues.

Simple Squamous Epithelium

A type of epithelial tissue consisting of a single layer of flat cells that facilitates diffusion and filtration in sites such as the alveoli of the lungs and the glomeruli of the kidneys.