Multiple Choice
Firm A can produce a unit of output with 10 hours of labor and 5 units of material. Firm B can produce a unit of output with 5 hours of labor and 10 units of material. Firm C can produce a unit of output with 10 hours of labor and 10 units of material. If the prices of labor and material are $10 per hour and $5 per unit, respectively, which of these firms is economically efficient?
A) firm A only
B) firm B only
C) firm C only
D) Firms A and B could both be economically efficient.
Correct Answer:
Verified
Correct Answer:
Verified
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