Suppose that this conveyor-manufacturing firm has another location and would like you to evaluate the input mix decisions at this new location. Here is all you know about the new location. The marginal rate of technical substitution is currently 0.5. The marginal product of labor at its target level of output is 60 rollers per hour. What is the marginal product of capital? If the rental rate for capital is $24 per hours at this location and the wage paid to labor is $12 per hour, could this location be minimizing the costs of producing its target level of output? Explain briefly.
Suppose that this conveyor-manufacturing firm has another location and would like you to evaluate the input mix decisions at this new location. Here is all you know about the new location. The marginal rate of technical substitution is currently 0.5. The marginal product of labor at its target level of output is 60 rollers per hour. What is the marginal product of capital? If the rental rate for capital is $24 per hours at this location and the wage paid to labor is $12 per hour, could this location be minimizing the costs of producing its target level of output? Explain briefly.
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 15P
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Suppose that this conveyor-manufacturing firm has another location and would like you to evaluate the input mix decisions at this new location. Here is all you know about the new
location. The
the rental rate for capital is $24 per hours at this location and the wage paid to labor is $12 per hour, could this location be minimizing the costs of producing its target level of output? Explain briefly.
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