X and Y are both factors of production. X's marginal product is 30 and Y's is 20. X is $5 each and Y is $4 each. Knowing that Y costs less than X, we can assume that the firm will make the same output at a cheaper cost by using less of X and more of L. Is this statement true or false? Explain.
X and Y are both factors of production. X's marginal product is 30 and Y's is 20. X is $5 each and Y is $4 each. Knowing that Y costs less than X, we can assume that the firm will make the same output at a cheaper cost by using less of X and more of L. Is this statement true or false? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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X and Y are both factors of production. X's marginal product is 30 and Y's is 20. X is $5 each and Y is $4 each. Knowing that Y costs less than X, we can assume that the firm will make the same output at a cheaper cost by using less of X and more of L.
Is this statement true or false? Explain.
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