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28 Sep 2019
A firm uses two variable inputs, labor (L) and raw materials (M), in producing its output. At its current level of output: PL = $20/unit, PM = $3/unit, MPL = 30, and MPM = 5. a. Determine whether the firm is operating efficiently, given that its objective is to minimize the cost of producing the given level of output. b. Determine what changes (if any) in the relative proportions of labor and raw materials need to be made to operate efficiently.
A firm uses two variable inputs, labor (L) and raw materials (M), in producing its output. At its current level of output: PL = $20/unit, PM = $3/unit, MPL = 30, and MPM = 5. a. Determine whether the firm is operating efficiently, given that its objective is to minimize the cost of producing the given level of output. b. Determine what changes (if any) in the relative proportions of labor and raw materials need to be made to operate efficiently.
Retselisitsoe PokothoaneLv10
28 Sep 2019
