Solve it correctly last time incorrect solution provides Q) 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
Solve it correctly last time incorrect solution provides Q) 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
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.9P
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Solve it correctly last time incorrect solution provides
Q)
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
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