l decreae firm uses both labor and capital to produce 25 units of output. The marginal product of the last unit of labor being employed is 100; the marginal product of the last unit of capital being In the long run, assume employed is 500. The wage rate of labor is $10. If the firm is minimizing the cost of producing 25 units of utput, what must be the unit price of capital?
l decreae firm uses both labor and capital to produce 25 units of output. The marginal product of the last unit of labor being employed is 100; the marginal product of the last unit of capital being In the long run, assume employed is 500. The wage rate of labor is $10. If the firm is minimizing the cost of producing 25 units of utput, what must be the unit price of 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:Will decrea
n he fong run, assume a firm uses both labor and capital to produce 25 units of output. The marginal
product of the last unit of labor being employed is 100; the marginal product of the last unit of capital being
employed is 500. The wage rate of labor is $10. If the firm is minimizing the cost of producing 25 units of
output, what must be the unit price of capital?
Expert Solution
Step 1
The two inputs are used here, labor and capital.
The marginal product of labor (MPL) = 100
The marginal product of capital (MPK) = 500
The wage rate of labor (w) = $10
we have to find out the unit price of capital (r).
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