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assume that a business firm finds that its profit is...

Question: assume that a business firm finds that its profit is...

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Assume that a business firm finds that its profit is greatest when it produc three techniques shown in the table below will produce the desired output. Resource Units Required Price per Technique Unit of Resource Technique Technique 2 Resource Labor and Entrepreneurial ability24 a. With the resource prices shown, which technique will the firm choose? (Click to select) Why? (Click to select) Will production using that technique entail profit or loss? (Click to select)

What will be the amount of that profit or loss? Will the industry expand or contract? (Click to select s b. Assume now that a new technique, technique 4, is developed. It combines 2 units of labor, 2 of land, 6 of capital, and 3 of entrepreneurial ability. In view of the resource prices in the table, will the firm adopt the new technique? to C. Suppose that an increase in the labor supply causes the price of labor to fall to $1.50 per unit, all other resource prices remaining unchanged. Which technique will the producer now choose?

d. Evaluate this statement: The scarce in supply. Resources that are scarcest relative to the demand for them have the highest prices. As a result, producers use these resources as sparingly as is possible. Does your answer to part c, above, bear out this contention? market system causes the economy to conserve most in the use of resources that are particularly

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