1 Je MARGINAL pRoDuct of LaBeR (mPr) L, ts the chanse tn output thak recuit From emetloying an addeda unit of labor. and the adattional output Produced by 4 additionol untk € lalec- Focwula 5 AY ob 2 2 outpuk. MARGINAL REVENUE PRo Duct coer L The additional Revenue a firm earns by em Ploying 4 addtional umk oF (Put, Cokes Paribus. formula + MEPL = MPL % Py Ry z $ a price oF oukeub x CYomPle + morginal Revere Product Per hour oF labor in Hamburger greduction (one aril) FoxA aloe | Tekal praluct [Mac aioe! Pre . on By frnocarnat pevene wakes Chamon e9ee og laber (wows adaed frees ceneiowers) | ger reed [Cf torts] “per vanbagea| OBE AU) o ° = Z a £0.35 : § S35 = by ie 2 Br a 035 £.9¢ to ta lo O35 2s a 46 6 0.35 _ 24 e 6 So 2 0,35 O.F 50 o ies ©Peeduch. marana\ OF out evr’) Gots keo ye kaa ha $20 Lo Marae Khe Price OF DULPYL. Px dimes the Marginal MARPL tel # Te. Pevense Product of latoor Product o€ laber,. mpt. ‘¢2. Firm's Profle MariMieng condition ta lawor Motkek. (pee yortalle toga). > ComMPBenay maca\nol Revenge and marginal Co8t oF . motimszte pMEL. > ourgut Prices. maramal Revenue « 4echnole I Peoduck OF a mk of iague (Leber) {pus prices > Moerginal cost OF Bumk FIFE (laber) Firms ual ere une! 2 W) = mMRPL, ‘dalobor marked b. A qetresentarwe Fem. ye)” 6 oe Be Ne ee wee y wReL a \ were Gpo-oe 5° Ae > A comPeritive Tica Using only one vattese, Factor, Factor BE Production Lnll use thot Facebr 05 feng ag Ike werginal Revenue Product Exceeds Its Unit Cok Firms, Weegh the cost oF Iebor as cerlected in wage + yates againsk the value PF lobers, Ib EMO Omid vertabl e Racter ve Production. ThEN [E Secetd values a goed wore khan VE Costs Fiems to hire the workecs to Proguce thak gveg. tne good will we Produced. k If fhe Yong Market viage Vs B, jn Abs Seenacig dhe Prefit —maniondeng. level of emtlyment 1% 169 becouse at that font, the marginal Revenue frodact Vie2. Wok 15 Fieme Profs rafters zing Condition i ¢aPiter marcel (2 Vaslable tmPuts : taber (1) ad cagiral Ct) ¢ > Finding the BRR Monienives Profits, Comtaré the magical revenue Product fe the Marginal Tesoafce Cork oF Uda: Lye cesource BS darding the mrt by MAC Wwe con Comease the addicional Tevedue gengrated Pet dolof Cosk gf ahe TE soscce: 2 map = Mec «ak the Point OF PROFIL Maxims tation the Catio mer /mee = see grange > Quer ar outeuk ence o& 43 Per uml, laloor cosh OF 3 A Per valk ond coral Cost OF & go ger umit, delerauae the prokie MAP MIZn} Combrrakroo of TEseuCces ond the cesPectie ‘ 2 Hee Meel 220 \ereleett mpekr Zo MRL) mee (Ue | [ee see = = . c 3 4.8 4 2a 30 Ans 2 | 36 24 [42] 6 | 46 \8 [oa 4 | <4 elit ls [se] 4 [ie [soa HK The Keoke MaFMiging combraatton OF resources wold be 3 umts labor ang ZwuUarks oF capital, ho preaace Hh omkS oF 9? ovteut and a Perit: promt OF 1 (F3x aL) - Geoxz)- (40x) + b & Fel lover a. % For capital mpl ZA. =H marl 30 - See ha se MAL “26 Smee 30 GE Feo Marinrcation the Catio eel aA mRPC : go the best Choice JM Firms fave 2 Vatiasle \aPputs eae Se labor, and 2 fowtal- and 4&6 ourpuk. TH 240, Tee aay oe Tete 2 3gae (Se eee ee ee : a 50 nick a joker The Pree marian ization 19 fatio 2 ye OT, seed wel 2o The Prokik maxkiMmitation In Ratio RBA 4 Bo “pret %0 Co the Firm wrt fake 2 lober and 2 capital. ine ovtruk TPL =30 Tees Ae 46. frome is > (hSemte) i Cesta laees #53) — (cot cotitel <3 = (4 * RE) - (ae%s) -(° co) = 925 Geen (3°) 228 -\50 —CAR ITAL MAREET - jo Gyre Tease: OR Stats. CAPITAL = Those goods Produced by the ec, Ome mic. Sutkem that ar e USed as 10 pther goods and services eee te terdece ure. MP > the adartional Praductiin that a fem eee tk adds an extea writ oF eal esos eoture OF the Production Function, alonasrse a ia e (aber Mou. MRE 16 the amount ext TA OUEPYE the Firm de4 ° an PETO Umik SE CaPital, hotding lve esa o m loot comskoak. ~ : pelt a aE. qith Kad UMS OF copikal od thet Preasced With cold ~ ontks oF cogitol- 2. wReeo CONUE BP Cent MPPE 3 Value Product. ts ane Merdrnol Revenue Creates due Fe an oddities OF ose Unk OF CoPital Focenula 27 MRED MPK X Pe Re = pesee OF ourpor FUge Fermuta aad chagcart he explain ansuwec . PkamPle a Marana Reverse Product Per hour oF capital \q Fucnrkute ProducksOn . Fatal capital | Total produc] Macaina Prabal] _ price Sarai } unnes quentkuce oF Capgta| (yatue added | Product Coneerines) | (yor hou) _ [tee fatesee [ pec gurmiture) | CEE SP) 0 o ® S fe — 4 13, i fas Fi = 40 8 Mis a 3 ag & fie g A 24 4 his £5 Maracal Fedack Cames oF oodPuk)Formula and diageam te expiaw answer! examele > marerne\ Reveaue Product Of CePital in ber morkee- Mmacgrnral Mara ma) KriceoF | Reveaue buspar lor cop ital. COP\ta\ Lo ao = =_ _— oe 40 1 $4.0 54 go SO 6S ait 2. ee to ad 84 4,0 416 4p 60 one aia | Production Function, 4 Mok .2. Fivn’s ProPh mMarimiting Condshren ta catihel mar ket. (dqmnand for neu catbal jower migresk rates are likely tO ¥ eaqnulake (ivestmend Ip the erensnt} og & whole. wheress ho her interest gore ore weely &9 slow inveskmenk, lovestment. 2 an Q. Capital Mav ket. bs Wem (eapiter) ae” vente? - “ $ oe u wigs 'o a= tee * mee Bt D | [00-900 loo In0 # A Pereectly ctommetiive Prent - Maximdiag Fiem vail keer (mvesting (a ne* capital UP Co khe Point at whieh Khe envecttd cate of fekucn 15 equal to the interact cate. TMS ls “ds analogous FO Saying that the firm wilt continue \avesking ue to Ene Penk ok which the margmal Cevenu€ Product oF cakital Wy Bavol the Price oF Carita, - 4 10, 19 dhs DF capital |S \20 betouse at chet Pool, the marginal Revenue Troduck oF Carprtal ls Ste. a x tf the 9e1eg Markt Tntecest mte ts Secenneio Fhe ProFIL Maxionaing lever3. FResent yaus See Present cscounted Value (FPU) OF Fresent vaiue Ly the Present dtscounking value oF R dollars +o we ald” & yeres 19 the Future G ene amount You need fo Po ® ak Current Intere Tories, tO Ensure thot You beday, st : pad ur with RB dollars k geors Feom now 4k 1s the Gucrenk marked value OF Receimng R dgollace In t4ears- Pv 2a joe (ate) Caltulakiog of Tekel Value PF O WY Pothital lovegsement » Peogeet ( Assuening «= do Percent ) END of | £ (9) ae eoieiarsen VALU teac 4 Loo (4.4) 83,33 Year 2 | Bee (t.2)° \38-68 Year > Agonaes (4.2)? 234.48 Yeor A S00 (1.97 Zrb. 03 yooc S| sperm le(tie | 244. be [Totat Reeser Value | Lios!- 4 % lower interet RATE , HIGHER Reestny Value = le the Present Value pon expected Siream of PaeMIMGAS FLOM An WV egkmwent enceeac tne Cok OF AWE investment necessary to ondertage i then khe Investment chould be undertaren, —