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J. pUIIILb QUESTION 11 You are an efficiency expert hired by a firm that uses machines (K) and workers (L) as inputs. The firm has

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J. pUIIILb QUESTION 11 You are an efficiency expert hired by a firm that uses machines (K) and workers (L) as inputs. The firm has estimated that the marginal product of labor is MPL = 2*( wiK) / (\\lL), (the symbol \\l represents the square root), while the marginal product of capital is MPK = 2*( w'L) I (\\lK), and the volume of output produced is Q = 2,400. The firm is currently using 400 units of L and 900 units of K, and has flexibility to substitute capital for labor and Vice versa. The input prices are w for Labor and r for capital. Then r' If w = $20 and r = $5, the firm should increase the use of K and decrease the use of

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