Multiple Choice
Suppose a firm uses labour and capital to produce output.The last unit of labour hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units.Use the optimal combination of inputs rule to calculate the price of capital if the price of labour is $6 per unit.The price of capital is
A) $2.
B) $10.
C) $20.
D) impossible to determine with the information given.
Correct Answer:
Verified
Correct Answer:
Verified
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