EatHub is a food delivery service that hires drivers (labor) and rents delivery vehicles (physical capital) to manage its operations. The current wage rate for drivers is $8 per hour, while the rental rate for vehicles is $10 per hour. Each driver can complete 50 deliveries per hour (marginal product of labor), and each vehicle enables 60 delivers per hour (marginal product of capital). Which of the following statements is correct about the firm's combination of labor and capital? Currently, the firm is not using the cost-minimization combination of labor and capital. Currently, the firm is using the cost-maximization combination of labor and capital. Currently, the firm is not using the cost-maximization combination of labor and capital. Currently, one cannot tell whether the firm is using the cost-minimization combination of labor and capital. Currently, the firm is using the cost-minimization combination of labor and capital.
EatHub is a food delivery service that hires drivers (labor) and rents delivery vehicles (physical capital) to manage its operations. The current wage rate for drivers is $8 per hour, while the rental rate for vehicles is $10 per hour. Each driver can complete 50 deliveries per hour (marginal product of labor), and each vehicle enables 60 delivers per hour (marginal product of capital). Which of the following statements is correct about the firm's combination of labor and capital? Currently, the firm is not using the cost-minimization combination of labor and capital. Currently, the firm is using the cost-maximization combination of labor and capital. Currently, the firm is not using the cost-maximization combination of labor and capital. Currently, one cannot tell whether the firm is using the cost-minimization combination of labor and capital. Currently, the firm is using the cost-minimization combination of labor and capital.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
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Transcribed Image Text:EatHub is a food delivery service that hires drivers (labor) and rents delivery vehicles (physical capital) to manage
its operations. The current wage rate for drivers is $8 per hour, while the rental rate for vehicles is $10 per hour.
Each driver can complete 50 deliveries per hour (marginal product of labor), and each vehicle enables 60 delivers
per hour (marginal product of capital).
Which of the following statements is correct about the firm's combination of labor and capital?
Currently, the firm is not using the cost-minimization combination of labor and capital.
Currently, the firm is using the cost-maximization combination of labor and capital.
Currently, the firm is not using the cost-maximization combination of labor and capital.
Currently, one cannot tell whether the firm is using the cost-minimization combination of labor and capital.
Currently, the firm is using the cost-minimization combination of labor and capital.
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