If the MPP of Labor Is 60 and the Price

question 41

Multiple Choice

If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

• A) more labor and less machinery.
• B) more machinery and less labor.
• C) more labor with the same amount of machinery.
• D) the current combination.