Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A competitive firm produces a single output using several inputs. The price of output rises by $4 per unit. The price of one of the

A competitive firm produces a single output using several inputs. The price of output rises by $4 per unit. The price of one of the inputs increases by $4 and the quantity of this input that the firm uses increases by 16 units. The prices of all other inputs stay unchanged. Given the firm always chooses technologically feasible profit maximizing production plans, we can infer that
a. the output of the good must have increased by at least 16 units.
b. the input of at least one of the other factors must have increased by at least 16 units
c. the inputs of the other factors must have stayed constant.
d. the output of the good must have increased by at least 8 units
e. the input of at least one of the other factors must have decreased by at least 16 units.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Auditing

Authors: Basu

1st Edition

8131728854, 978-8131728857

More Books

Students also viewed these Accounting questions