Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that a firm is using 100 units of labour and 50 units of capital to produce 200 completed client tax returns per day. The

Suppose that a firm is using 100 units of labour and 50 units of capital to produce 200 completed client tax returns per day. The price of labour is $10 per unit and the price of capital is $5 per unit. The MPL equals 2 and the MPK equals 5. In this situation,

A) the firm could lower its production costs by increasing labour input and decreasing capital input.

B) the firm should increase the use of both inputs.

C) the firm is minimizing its costs.

D) the firm could lower its production costs by decreasing labour input and increasing capital input.

E) the firm should decrease the use of both inputs.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lectures On Urban Economics

Authors: Jan K Brueckner

1st Edition

0262300311, 9780262300315

More Books

Students also viewed these Economics questions

Question

What is the preferred personality?

Answered: 1 week ago

Question

What is the relationship between humans?

Answered: 1 week ago