Answered

Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

A business is employing labor and capital to pave a road. At the current combination of inputs, the marginal product of labor is 45 square feet per day, and the marginal product of capital is 135 square feet per day. If labor costs $900 per day and capital costs $2,700 per day, the firm should

A hire less labor and more capital

B hire more labor and less capital

C hire less labor and less capital

D hire more labor and more capital

E maintain the current combination

Last time I posted this I was given an answer not on here.

Sagot :

D
Have a great day
Good day

Based on the information given, the correct option will be E. maintain the current combination.

It should be noted that in the equilibrium level, the formula will be:

MPl/L = MPk/k

45/900 = 135/2700

1/20 = 1/20

Therefore, since they're the same, the company should maintain the current combination.

Learn more about equilibrium on:

https://brainly.com/question/24735820

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.