If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should
A) increase its use of labor and employ less capital.
B) employ more capital.
C) increase its use of both labor and capital.
D) maintain its current factor utilization pattern.
B
Economics
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If a natural monopoly is regulated using
A) a marginal cost pricing rule, the firm maximizes its profit. B) an average cost pricing rule, the firm incurs an economic loss. C) a total cost pricing rule, the firm will exit the industry. D) a marginal cost pricing rule, the firm incurs an economic loss. E) an average cost pricing rule, the firm maximizes its profit.
Economics
The process by which investment banks guarantee a certain price to a firm issuing stocks or bonds is known as:
A) underwriting B) securitization C) proprietary trading D) microlending
Economics