Question
A firm produces at an output level where the marginal products of labor and capital are both 25 units. Suppose that the rental price of
A firm produces at an output level where the marginal products of labor and capital are both 25 units. Suppose that the rental price of labor and capital are $12.50 and $25 respectively.
- Is the firm maximizing profit?
- If the firm is not producing efficiently, how might it do so?
- If the output produced can be sold at a price of $2, what is the value marginal product of labor?
- If the output produced can be sold at a price of $2, what is the value marginal product of capital?
May you please thoroughly explain?
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Financial Accounting Making The Connection
Authors: J David Spiceland, Wayne Thomas, Don Herrmann
1st Edition
0077862260, 9780077862268
