Q)solve it correctlyThe marginal products of capital (MPK) and labor (MPL) are, respectively, MPK = 2000 units; MPL = 1500 units. The input prices are: PK = $10/unit; and PL = $150/unit. To minimize production costs, the firm should A.increase both capital and laborB.decrease both capital and laborC.increase capital; decrease laborD.decrease capital; increase laborE.do nothing; costs are minimized

The marginal product or marginal physical productivity of an input (factor of production) in…

Answered: The marginal products of capital (MPK)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q)solve it correctly

The marginal products of capital (MP_K) and labor (MP_L) are, respectively, MP_K = 2000 units; MP_L = 1500 units. The input prices are: P_K = $10/unit; and P_L = $150/unit. To minimize production costs, the firm should

A.
increase both capital and labor
B.
decrease both capital and labor
C.
increase capital; decrease labor
D.
decrease capital; increase labor
E.
do nothing; costs are minimized

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