If the MPP of the last unit of labor hired equals 6 and the MPP of the last unit of capital hired equals 8, and the price of labor is $4 per unit and the price of capital is $4 per unit, then the firm
A) is minimizing its costs with this combination of factors.
B) is maximizing its profits with this combination of factors.
C) should hire more labor and less capital in order to minimize its costs.
D) should hire more capital and less labor in order to minimize its costs.
E) a and b
Correct Answer:
Verified
Q54: The wage rate increases 8 percent, and
Q55: Exhibit 26-2 Q56: Which of the following can bring about Q57: If a firm is a factor price
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