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.
Correct Answer:
Verified
Q41: A firm obeys the least-cost rule for
Q45: Applying the least-cost rule to two factors,
Q48: For a perfectly competitive firm, when the
Q50: A measure of the value that one
Q52: The firm's factor demand curve is the
A)same
Q53: The market demand curve for labor is
A)the
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