#8 *Remember the least cost method is a lot like the utility maximizing rule from chapter one.However, here we will make sure that we follow this formula:Marginal Product of Labor/Price of Labor = Marginal Product of Capital/Price of CapitalIf this ends up being equal then they are using the optimal number of employees and capital(machines). If one is greater then the business would want to use that one more until thenumbers become equal.8) EFG Company is using labor and capital to build phones. The last employee produced 90more phones and their wage was $30 per hour. The last unit of capital (machine) produced 100more and it cost $10 to use. Use the least cost method formula above to state if they are usingthe least cost method of production. If they aren't using the least cost method should they usemore workers or machines? Show your work.

The marginal product for a factor of production refers to the addition in output as a result of…

8) EFG Company is using labor and capital to build phones. The last employee produced 90 more phones and their wage was $30 per hour. The last unit of capital (machine) produced 100 more and it cost $10 to use. Use the least cost method formula above to state if they are using the least cost method of production. If they aren't using the least cost method should they use more workers or machines? Show your work.

8) EFG Company is using labor and capital to build phones. The last employee produced 90 more phones and their wage was $30 per hour. The last unit of capital (machine) produced 100 more and it cost $10 to use. Use the least cost method formula above to state if they are using the least cost method of production. If they aren't using the least cost method should they use more workers or machines? Show your work.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

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