If the MPP of the Last Unit of Labor Hired

question 69

Multiple Choice

If the MPP of the last unit of labor hired equals 6 and the MPP of the last unit of capital hired equals 8, and the price of labor is $4 per unit and the price of capital is $4 per unit, then the firm

• A)is minimizing its costs with this combination of factors.
• B)is maximizing its profits with this combination of factors.
• C)should hire more labor and less capital in order to minimize its costs.
• D)should hire more capital and less labor in order to minimize its costs.
• E)a and b

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