A firm should allocate its workforce between the two plants such that the average product of workers in the two plants is the same.

Question

Quizplus · Accepted Answer

The firm should allocate its workforce between the two plants such that the marginal product of workers in the two plants is the same, not the average product. This is in accordance with the principle of equi-marginal utility, ensuring the most efficient allocation of resources.

A Firm Should Allocate Its Workforce Between the Two Plants