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In: Economics

Your firm is using 300 units of labor and 2000 units of capital to produce 5000...

Your firm is using 300 units of labor and 2000 units of capital to produce 5000 units of output. If you hired an additional unit of labor output would increase by 10 units. An extra unit of capital would add 25 units of output. The wage rate is $10 per hour, and the rental rate is $50.

  1. What are the marginal products of labor and capital per dollar?
  2. Is your firm producing at the lowest possible cost? How do you know?
  3. What should the firm do to minimize the cost of producing 5000 units of output?
  4. What would happen to MPL and MPK?

Solutions

Expert Solution

Please give ratings it will be appreciable thank you

Rahul Sunny answered 6 months ago
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