If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should
A) increase its use of labor and sell employ less capital.
B) employ more capital.
C) increase its use of both labor and capital.
D) maintain its current factor utilization pattern.
Correct Answer:
Verified
Q340: Q342: If a firm uses only capital and Q343: The profit maximizing combination of resources Q344: If a perfectly competitive firm is currently Q348: To minimize total costs for a particular Q348: A perfectly competitive firm discovers that its Q351: Cost minimization suggests that two inputs should Q358: When a firm is hiring an input Q359: A firm will hire a unit of Q364: "Other things being equal, the monopolist hires
A) usually
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