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At a Given Output Level, If the Cost of Capital

Question 87

Multiple Choice

At a given output level, if the cost of capital is $40 per hour, the wage paid to employees is $30 per hour, the marginal product of capital is 120 units per hour, and the marginal product of labor is 120 units per hour, the firm is ________ .


A) on a short- run average total cost curve, but not the long- run average cost curve
B) on the long- run average total cost curve, but not a short- run average cost curve
C) on neither a short- run average total cost curve nor the long- run average cost curve
D) on both a short- run average total cost curve and the long- run average cost curve

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