1 Assume the labor and kapital are purchase in a perfectly competitive market and the final product is sold in a perfectly competitive market.

LABOR P= $4 KAPITAL P=$6

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resource total prod marg prod total rev MRP resource total prod marg prod total rev MRP

LABOR KAPITAL

0 0 0 0

1 16 $32 1 24 $48

2 28 $56 2 41 $82

3 38 $76 3 53 $106

4 46 $92 4 63 $126

5 53 $106 5 72 $144

6 59 $118 6 80 $160

7 63 $126 7 86 $172

8 65 $130 8 89 $178

A At an output level of 99, what is the cost minimizing amount of Labor and Kapital? 10 pts

B At an output level of 154, what is the cost minimizing amount of Labor and Kapital5 pts

C If the price of the final product is $2.00, what is the profit maximizing level of Labor and Kapital? What is the total profit? +10pts