STUDY GUIDE F/MICROECONOMICS
STUDY GUIDE F/MICROECONOMICS
21st Edition
ISBN: 9781307066920
Author: McConnell
Publisher: MCG/CREATE
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Chapter 22, Problem 4DQ
To determine

The efficient allocation of the resources.

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A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should: LO16.5 a. Increase labor while decreasing capital. b. Decrease labor while increasing capital. c. Keep the current amounts of capital and labor just as they are. d. None of the above.
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