Table 144 -Refer to Table 14

question 107

Essay

Table 14.4
$\begin{array}{|c|c|c|c|c|c|c|c|}\hline \begin{array}{l} \text { Number }\\ \text { of }\\ \text { Machines }\\\end{array}& \begin{array}{l} \text { Output }\\ \text { of }\\ \text { Pencils }\\ \text { (boxes }\\ \text { per }\\ \text { week)}\\\end{array} & \begin{array}{l} \text { Marginal }\\ \text { Product of }\\ \text { Capital }\\\end{array} & \begin{array}{l} \text { Product }\\ \text { Price }\\ \text { (dollars }\\ \text { per box) }\\\end{array} & \begin{array}{l} \text { Total }\\ \text { Revenue }\\\end{array} & \begin{array}{l} \text { Marginal }\\ \text { Revenue }\\ \text { Product of }\\ \text { Capital }\\\end{array} & \begin{array}{l} \text { Rental }\\ \text { Cost per }\\ \text { Machine }\\\end{array} & \begin{array}{l} \text {Additional }\\ \text { Profit from }\\ \text { Renting }\\ \text { One }\\ \text { Additional }\\ \text { Machine }\\\end{array} \\\hline L & Q & M P & P & T R & \text { MRP } & R \\\hline 0 & 0 & - & \$ 40 & & - & \$ 240 \\\hline 1 & 10 & & 40 & & & 240 \\\hline 2 & 18 & & 40 & & & 240 \\\hline 3 & 25 & & 40 & & & 240 \\\hline 4 & 31 & & 40 & & & 240 \\\hline 5 & 36 & & 40 & & & 240 \\\hline 6 & 40 & & 40 & & & 240 \\\hline\end{array}$
-Refer to Table 14.4.Dante owns a pencil factory and faces the situation shown in the table and the cost of renting a machine is $240 per week.
a.Fill in the blanks in the table and determine the profit-maximizing number of machines for Dante to rent.Explain why renting this number of machines is profit maximizing.
b.Draw Dante's demand curve for capital.

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Definitions:

Direct Labor

Labor costs directly attributable to the production of goods, including wages of workers who are actively involved in the manufacturing process.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute an integral part of the finished product.

Unassembled Product

A product that is sold in parts and requires assembly by the customer or retailer before it can be used.

Assembled Product

A product that has been put together from various parts or components, ready for sale or use.