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16. A firm produces an item using only labor and capital. The firm faces a price per unit of capital that is twice the
16. A firm produces an item using only labor and capital. The firm faces a price per unit of capital that is twice the price per unit of labor. However, marginal product of labor is 3/4th of the marginal product of capital. Is the firm employing resources optimally? Explain and suggest better employment of resources, if necessary.
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The marginal product of labor also known as MPL is the increase in total production that a co...
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
