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

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

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 18PAE

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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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