A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile

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A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should:

a. Increase labor while decreasing capital.

b. Decrease labor while increasing capital.

c. Keep the current amounts of capital and labor just as they are.

d. None of the above. 

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Microeconomics Principles, Problems and Policies

ISBN: 978-1259450242

20th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

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