A firm uses two inputs: labor and capital. The price of labor is and the price of

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A firm uses two inputs: labor and capital. The price of labor is and the price of capital is r. The firm's long-run total cost is given by the equation Based on this equation, which change would cause the greater upward rotation in the long-run total cost curve: a 10 percent increase in or a 10 percent increase in r? Based on your answer, is the firm's production operation more capital intensive or labor intensive? Explain your answer.

A firm uses two inputs: labor and capital. The price
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Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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