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Demonstrate that profit maximizing firms in a competitive economy pay factors of production their marginal products. Given Y=F(K,L) where output, Y, is a function of
Demonstrate that profit maximizing firms in a competitive economy pay factors of production their marginal products. Given Y=F(K,L) where output, Y, is a function of labor, L, and capital, K. The wage paid to labor is W and the rental rate of capital is R.
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