If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery, a profit-maximizing firm will
A) reduce the labor used and increase the machinery used if labor costs half as much as machinery.
B) reduce the labor used and increase the machinery used if labor and machinery cost the same amount.
C) reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery.
D) reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.
Correct Answer:
Verified
Q80: If a profit-maximizing firm hires an additional
Q81: The marginal revenue product of a resource
Q82: The change in the total revenue of
Q83: The rule for the optimal use of
Q84: Firms should hire additional units of a
Q86: An apple orchard currently hires 10 workers.
Q87: Suppose a change in technology increases the
Q88: The optimal level of resource use comes
Q89: When the marginal revenue product of an
Q90: Table 12-5
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents