Economics 9708 · AS & A Level · Factors of production

Factors of production — practice question

The table summarises the firm’s current position in a perfectly competitive industry. factor X marginal physical product 2 factor price $5.00; factor Y marginal physical product 4 factor price $10.00 If the firm sells its product at $3 and wants to maximise profits, which factor should it employ?

  • Amore of both X and Y
  • Bmore of X and less of Y
  • Cmore of Y and less of X
  • Dless of both X and Y

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