Macmillan Learn A manager of a perfectly competitive firm observes that the marginal product of labor is 5 units per hour, the marginal produ of capital is 40 units per machine, the wage is $20 per hour, the rental price of capital is $120 per machine, and the price of output is $5 per unit. Please complete the following statement. To maximize profit, the manager should hire labor and rent capital.
Macmillan Learn A manager of a perfectly competitive firm observes that the marginal product of labor is 5 units per hour, the marginal produ of capital is 40 units per machine, the wage is $20 per hour, the rental price of capital is $120 per machine, and the price of output is $5 per unit. Please complete the following statement. To maximize profit, the manager should hire labor and rent capital.
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 15P
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Transcribed Image Text:Macmillan Learn
A manager of a perfectly competitive firm observes that the marginal product of labor is 5 units per hour, the marginal produ
of capital is 40 units per machine, the wage is $20 per hour, the rental price of capital is $120 per machine, and the price of
output is $5 per unit. Please complete the following statement.
To maximize profit, the manager should hire
labor and rent
capital.
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