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Points Awarded93.52Points Missed6.48Percentage93.5%1.SCENARIO B: Suppose that due to favorable economic conditions, the price that this firm can sell its product for rises to $22.For question 1. Fill in Table B - Each box is worth ½ point for a total of 9 points for Table BTABLE B- The wage is still $150 and the price of output (Q) is now $22.LQMPLMRPMarginal ProfitTotal Profit0 0---------------------01 88$$$2 2012$$$3 288$$$4 357$$$5 416$$$6 454$$$Points Earned:9.0/9.01762626264114140176261661544170132-1815288-6290
2.Use Scenario B/Table B to answer the questions 2 – 4 below.(3 points) The profit maximizing output (Q) is .Points Earned:3.0/3.03.(3 points) The profit maximizing level of labor (L) input is workers.Points Earned:3.0/3.04.354
(3 points) The maximum profit for this firm is .Points Earned:3.0/3.0Correct Answer(s):1705.DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs.(2 points) Using Scenario B/Table B, go to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B.B and C are on the given curve.Points Earned:0.0/2.0Correct Answer(s):6.(3 points) Using Scenario B/Table B, go to Graph 2 and draw this firm’s newMRP curve (remember that MRP = P* MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B.Points Earned:3.0/3.0170
7.(3 points) Using Scenario B/Table B, draw this firm’s Supply curve on Graph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was $20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to $22, and the profit maximizing Q you found in your answer for #2 above). Connect the two points and label your supply curve.Points Earned:3.0/3.0