ps_9 - Problem Set #9 Ec 201 Michigan State University...

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Problem Set #9 Ec 201 Spring, 2009 Michigan State University L. Martin 1. Pruney’s Pruners prunes perennials in Pontiac. She hires pruners for $40 per day. She charges her customers $2 per pruned perennial. Her production function is given below. Pruners Perennials Marginal product Value of the Marginal (labor days) (output per day) Product 1 40 2 70 3 90 4 100 5 105 a. Complete the table. b. Find the profit maximizing number of pruners to hire. c. Draw a diagram. 2. The Sad Sack Sax Sacks company produces convenient carrying cases for Saxaphones. It has fixed costs of $100, none of which are recoverable. The price is $80 per case. Output Total cost Average cost Average recoverable Marginal cost cost 0 $100 1 $110 2 $130 3 $160 4 $200 5 $250 6 $310 7 $380 8 $460 9 $550 10 $650 a. Complete the table. b. Find the profit maximizing number of perennials to prune. c. Find the exit price.
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d. Find the entry price. e.
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ps_9 - Problem Set #9 Ec 201 Michigan State University...

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