The firms monthly cost of capital is $400 per unit, the monthly cost of labor is $100 per unit, and the monthly budget is equal to $4000. The firm decides to purchase 20 units of labor when the MPL = 10. In order to minimize costs, what amount of capital will the firm purchase? What is the MPK (marginal product of capital?))

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     five units of capital, and the marginal product of capital is 20.
      ten units of capital, and the marginal product of capital is 20.
      five units of capital, and the marginal product of capital is 40.
      ten units of capital, and the marginal product of capital is 40.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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five units of capital, and the marginal product of capital is 40.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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