Question
A firm employs 30 workers ($10 per hour) and 10 units of capital ($5 per hour). At these levels, the marginal product of labor is
A firm employs 30 workers ($10 per hour) and 10 units of capital ($5 per hour). At these levels, the marginal product of labor is 20 and the marginal product of capital is 15. Is the firm minimizing cost? If yes, why? If not, what changes should it make? How does this answer depend on the time frame of the analysis?
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
978-1118273630, 111827363X, 978-1118319185
