If it manufactures at home, a firm faces input prices for labor and capital of wn and
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If it manufactures at home, a firm faces input prices for labor and capital of wn and nr and produces qn units of output using Ln units of labor and Kn units of capital. Abroad, the wage and cost of capital are half as much as at home. If the firm manufactures abroad, will it change the amount of labor and capital it uses to produce qn? What happens to its cost of producing qn? M
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Microeconomics Theory And Applications With Calculus
ISBN: 9780133019933
3rd Edition
Authors: Jeffrey M. Perloff
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