Suppose a firm is employing labour (L) and capital (K) such that MPK/MPL = PK/PL.If the price of labour rises,the cost- minimizing firm should
A) employ more labour and less capital because MPK/MPL < PK/PL.
B) do nothing.
C) employ more capital and less labour because MPK/MPL > PK/PL.
D) employ more capital and less labour because MPK/MPL < PK/PL.
E) employ more labour and less capital because MPK/MPL > PK/PL.
Correct Answer:
Verified
Q13: TABLE 8-1 Q114: The figure below shows a family of Q115: Assume a firm is using 10 units Q116: The figure below shows the isocost lines Q117: FIGURE 8- 4 Q120: The figure below shows the isocost lines Q121: A downward- sloping LRAC curve will shift 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
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