If a cost-minimization firm’s marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the cost of capital is $14 per unit, then A. The cost of labor must be $1/7 B. The cost of labor (wage rate) must be $2 C. The cost of labor must be $7 D. The cost of labor must be $14 as well
If a cost-minimization firm’s marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the cost of capital is $14 per unit, then A. The cost of labor must be $1/7 B. The cost of labor (wage rate) must be $2 C. The cost of labor must be $7 D. The cost of labor must be $14 as well
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.8P
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If a cost-minimization firm’s marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the cost of capital is $14 per unit, then
A.
The cost of labor must be $1/7
B.
The cost of labor (wage rate) must be $2
C.
The cost of labor must be $7
D.
The cost of labor must be $14 as well
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