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Assume a Firm Is Producing 1000 Units of a Good

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Assume a firm is producing 1000 units of a good by using two inputs,capital and labor,whose per unit prices are $50 and $20.Assume also that the marginal physical product of the last unit of capital is 25 and the marginal physical product of the last unit of labor is 15.In order to minimize its costs of production,the firm should adjust its combination of inputs by employing more labor and less capital.

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