A firm is producing 1,000 units of output with 40 units of labor and 30 units of capital. The marginal product of the last units of labor and capital are, respectively, MPl= 60 and MPk = 120. The price of labor and capital are respectively, w = 30 and r = 40
Showing posts with label Marginal Rate of Substitution. Show all posts
Showing posts with label Marginal Rate of Substitution. Show all posts
Saturday, February 5, 2011
Marginal Rate of Substitution
A firm is producing 1,000 units of output with 40 units of labor and 30 units of capital. The marginal product of the last units of labor and capital are, respectively, MPl= 60 and MPk = 120. The price of labor and capital are respectively, w = 30 and r = 40
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