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Suppose that Mitsubishi is operating efficiently (i.e. minimizing their costs of production). To hire workers, suppose that Mitsubishi must pay the competitive hourly wage of
Suppose that Mitsubishi is operating efficiently (i.e. minimizing their costs of production). To hire workers, suppose that Mitsubishi must pay the competitive hourly wage of 1,800. In addition, suppose that Mitsubishi determines that its marginal product of capital is 0.8 cars per hour and that capital is procured in a highly competitive market. Finally, suppose that the selling price of Mitsubishi's car is 1,200,000. (7) a. Determine the rate at which Mitsubishi can rent capital. (3) b. Determine Mitsubishi's marginal product of labour.
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