The Following Table Shows the Total Output Produced by Different

question 72

Multiple Choice

The following table shows the total output produced by different units of a resource.Assume that the resource and output markets are both perfectly competitive.The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50. Table 14.2
Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue.
Refer to Table 14.2.How many units of the resource will a profit-maximizing firm hire?

• A)Two labor hours
• B)Between two and three labor hours
• C)Between three and four labor hours
• D)More than four labor hours
• E)Three labor hours

---

Definitions:

Economic Profit-Maximising

The point at which a firm achieves the highest profit possible given its production costs and market conditions.

Cost-Based Pricing

A pricing method used by companies to determine the selling price of a product by adding a profit margin to the total cost of producing or purchasing the product.

Standard Cost Analysis

The practice of comparing standard costs to actual costs to identify variances, understand causes, and take corrective actions.

Lower Limit

The minimum threshold or boundary for a variable or parameter within a given context, such as statistical control limits.