Assume That an Appliance Manufacturer Is Employing Variable Resources X

question 187

Multiple Choice

Assume that an appliance manufacturer is employing variable resources X and Y in such amounts that the MRPs of the last units of X and Y employed are $100 and $60, respectively. Resource X can be hired at $50 per unit and resource Y at $20 per unit. The firm

• A) should hire more of both X and Y.
• B) should hire more of Y and less of X.
• C) is producing with the least-costly combination of X and Y but could increase its profits by employing more of X and less of Y.
• D) is using the least-costly combination of X and Y but could increase its profits by employing less of both X and Y.

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