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The following problem is somewhat advanced. Using symbols, we can write that the marginal product of labor is equal to . Marginal cost is equal
The following problem is somewhat advanced. Using symbols, we can write that the marginal product of labor is equal to . Marginal cost is equal to . Because fixed costs by definition don't change, marginal cost is also equal to . If Jill Johnson's only variable cost is labor cost, then her variable cost is just the wage times the quantity of workers hired, or wL. After the Sears department store chain emerged from bankruptcy, its CEO Edward Lampert was quoted as saying: "Our goal is to continue to shrink the size of our stores." Source: Suzanne Kapner, "Edward Lampert's Plan for Sears: Smaller Stores, Less Apparel," Wall Street Journal, February 13, 2019. Is Lampert's remark referring to Sears's economic short run or its economic long run? Briefly explain. A. Long run, because changing the size of stores takes a significant amount of time. B. Short run, because the store size is fixed. C. Long run, because other inputs can be changed. D. Short run, because the store size impacts production now
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