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QUIZ6 - 1 What happens to the firm’s level of profits 2(5...

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Econ 301: Intermediate Microeconomic Theory NAME: Korinna K. Hansen Quiz 6 1). (5 points) Suppose a firm is maximizing profits in the short run with variable factor X 1 and fixed factor X 2 . If the price of X 2 goes down, what happens to the firm’s use of X
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Unformatted text preview: 1 ? What happens to the firm’s level of profits? 2). (5 points) If P MP 1 > W 1 , then should the firm increase or decrease the amount of factor 1 in order to increase profits?...
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