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Consider a grain processing firm for which its labor

Question # 00621696
Subject: Economics
Due on: 11/25/2017
Posted On: 11/25/2017 05:31 AM

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Consider a grain processing firm for which its labor and capital have a marginal revenue products of MRPL = $22/hour and MRPK = $35,000/machine, respectively.


a. (6 pts.) Suppose that wages for the kind of labor hired by the grain processor are $14/hour and the price of capital is $52,000/machine. Explain whether the processor is maximizing profits or not. If the firm is not maximizing profits, explain what specific action should be taken to increase its profits.


b. (6 pts.) Suppose instead that wages for the kind of labor hired by the grain processor are $22/hour and the price of capital is $28,000/machine. Explain whether the processor is maximizing profits or not. If the firm is not maximizing profits, explain what specific action should be taken to increase its profits.

Tags labor firm proceing grain consider profits maximizing proceor explain capital labor firm grain price hired action increase taken kind specific wages suppose 22hour marginal revenue proceing instead 28000machine products mrpl 35000machine 14hour 52000machine mrpk consider

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