Consider a firm that uses only labour and capital as inputs.At the present use of labour and capital,the MP of labour is four times the MP of capital,and the price of labour is twice the price of capital.In order to minimize its costs,the firm should
A) decrease capital and increase labour.
B) decrease both capital and labour.
C) stay at its present factor mix.
D) substitute capital for labour until their marginal products are equal.
E) increase both labour and capital.
Correct Answer:
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Q13: TABLE 8-1 Q117: FIGURE 8- 4 Q119: Suppose a firm is employing labour (L)and Q120: The figure below shows the isocost lines Q121: A downward- sloping LRAC curve will shift Q123: Which of the following factors is most 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