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Firm Output Assignment | Homework For You

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November 22nd, 2019

A firm is producing 1,000 units of output with 40 units of labor and 30 unit of capital. The marginal product of the last units of labor and capital are, respectively, MPL = 60 and MPK= 120. The prices of labor and capital are, respectively, w = 30 and r =40.

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a. At the combination of inputs the MRTS is ___________________ (greater than, less than, equal to) the input price ratio, w/r.

b. The firm can increase_________ by one unit while reducing ___________ by _________ unit(s), and keep output constant. This will reduce cost by $____________.

c. To minimize the cost of producing 1,000 units of output the firm will increase __________ and decrease ___________ until _________ equals ________ or, in other words, _________ equals _________. Get Business Law homework help today

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