A Competitive Firm Produces Output Using Three Fixed Factors and One

question 51

Multiple Choice

A competitive firm produces output using three fixed factors and one variable factor. The firm's short-run production function is q = 524x - 4x², where x is the amount of variable factor used. The price of the output is $3 per unit and the price of the variable factor is $12 per unit. In the short run, how many units of x should the firm use?

• A) 130
• B) 32
• C) 25
• D) 65
• E) None of the above.

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