A dressmaker uses labor and capital (sewing machines) to produce dresses in a competitive market. Suppose the

Question:

A dressmaker uses labor and capital (sewing machines) to produce dresses in a competitive market. Suppose the last unit of labor hired cost $1,000 per month and increased output by 100 dresses. The last unit of capital hired (rented) cost $500 per month and increased output by 80 dresses. Is the dressmaker minimizing costs? If not, what changes need to be made?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Economics Private And Public Choice

ISBN: 9780357133996

17th Edition

Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Question Posted: