Martha owns a factory which can produce 150 coffee mugs using the following five combinations of labor and capital:
If the price of capital is $5 per unit and the price of labor is $3 per unit, calculate the total cost of producing 150 coffee mugs under each technology. Which technology would a profit-maximizing firm use?

Question

Martha owns a factory which can produce 150 coffee mugs using the following five combinations of labor and capital:
  If the price of capital is $5 per unit and the price of labor is $3 per unit, calculate the total cost of producing 150 coffee mugs under each technology. Which technology would a profit-maximizing firm use?

Quizplus · Accepted Answer

The Answer of Martha owns a factory which can produce 150 coffee mugs using the following five combinations of labor and capital:
  If the price of capital is $5 per unit and the price of labor is $3 per unit, calculate the total cost of producing 150 coffee mugs under each technology. Which technology would a profit-maximizing firm use?

Martha Owns a Factory Which Can Produce 150 Coffee Mugs