Business, 24.05.2021 14:00, pinkpearl2022

Assume that a profit-maximizing firm which competes in a purely competitive product industry has only two factor inputs, labor and capital, and that resource prices remain constant. This firm finds that the marginal revenue product of labor (MRP) when divided by the price for labor (MRC) is less than one. The firm also finds that the marginal revenue product for capital (MRP) when divided by the price (MRC) is greater than one. If this firm wishes to produce the same amount of output with these two resources, but minimize the cost of output, this firm must employ: a. less labor and more capital
b. more capital
c. more labor and capital
d. less labor
e. more labor and less capital

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Assume that a profit-maximizing firm which competes in a purely competitive product industry has onl...