A firm produces output with capital and labor. Suppose currently the marginal product of labor is 28 and the marginal product of capital is 5. Each unit of labor costs $11 and each unit of capital costs $3. Is the firm minimizing the cost ofproduction? Explain.be the marginal product of labor, r be the price of capital, w be the cost of labor, and MRTS be the marginal rate of technical substitution.Let MPKbe the marginal product of capital, MPLThe firm isMPМPKA. not minimizing the cost of production becauserwMPKMPLB. not minimizing the cost of production because MRTS >MPKMPLC. minimizing the cost of production becauserMPKD. minimizing the cost of production because MRTS =MPLMPMPLKrO E. minimizing the cost of production becauseIf not, how could the firm decrease the cost of production holding output constant?and lessThe firm could decrease the cost of production holding output constant by using more

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A firm produces output with capital and labor. Suppose currently the marginal product of labor is 28 and the marginal product of capital is 5. Each unit of labor costs $11 and each unit of capital costs $3. Is the firm minimizing the cost of production? Explain. Let MP be the marginal product of capital, MP, be the marginal product of labor, r be the price of capital, w be the cost of labor, and MRTS be the marginal rate of technical substitution. The firm is MPK MP, O A. not minimizing the cost of production because r MP, O B. not minimizing the cost of production because MRTS> MPL MPK MP O C. minimizing the cost of production because MP O D. minimizing the cost of production because MRTS = MPL MPK MPL O E. minimizing the cost of production because If not, how could the firm decrease the cost of production holding output constant? The firm could decrease the cost of production holding output constant by using more V and less

A firm produces output with capital and labor. Suppose currently the marginal product of labor is 28 and the marginal product of capital is 5. Each unit of labor costs $11 and each unit of capital costs $3. Is the firm minimizing the cost of production? Explain. Let MP be the marginal product of capital, MP, be the marginal product of labor, r be the price of capital, w be the cost of labor, and MRTS be the marginal rate of technical substitution. The firm is MPK MP, O A. not minimizing the cost of production because r MP, O B. not minimizing the cost of production because MRTS> MPL MPK MP O C. minimizing the cost of production because MP O D. minimizing the cost of production because MRTS = MPL MPK MPL O E. minimizing the cost of production because If not, how could the firm decrease the cost of production holding output constant? The firm could decrease the cost of production holding output constant by using more V and less

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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