Yvette makes sweaters in her home. Starting with just some knitting needles and yarn, she was able to knit 70 sweaters per year. Now some local stores have expressed interest in her designs and offered to buy her sweaters for $10 each. This makes it worthwhile for her to invest in some capital; in particular, she could produce many more sweaters if she invested in one or more looms, as shown in the following table. Assume that Yvette's sweater business is a perfectly competitive firm. Complete the following table by calculating the marginal physical product (MPP) of each loom and the marginal revenue product (MRP) of each loom Quantity of Input (Looms) MPP of Each Loom (Sweaters) MRP of Each Loom (Dollars) Output (Sweaters per year) 70 130 181 226 265 301 If the rental price of a loom is $420 per year, Yvette should use Suppose the demand for sweaters is very elastic, while the demand for digarettes is very inelastic.
Yvette makes sweaters in her home. Starting with just some knitting needles and yarn, she was able to knit 70 sweaters per year. Now some local stores have expressed interest in her designs and offered to buy her sweaters for $10 each. This makes it worthwhile for her to invest in some capital; in particular, she could produce many more sweaters if she invested in one or more looms, as shown in the following table. Assume that Yvette's sweater business is a perfectly competitive firm. Complete the following table by calculating the marginal physical product (MPP) of each loom and the marginal revenue product (MRP) of each loom Quantity of Input (Looms) MPP of Each Loom (Sweaters) MRP of Each Loom (Dollars) Output (Sweaters per year) 70 130 181 226 265 301 If the rental price of a loom is $420 per year, Yvette should use Suppose the demand for sweaters is very elastic, while the demand for digarettes is very inelastic.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter2: Fundamental Economic Concepts
Section: Chapter Questions
Problem 4E
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