A snack food factory in the Tuas area of Singapore employs 100 workers and 20 machines....

 

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A snack food factory in the Tuas area of Singapore employs 100 workers and 20 machines. Currently the marginal product of labor is $6 and that of capital is $15. Assuming that the market prices for labor and capital are $3 and $25 respectively; answer the following: Is the firm maximizing profits? b. Should the firm change its use of labor and capital? If yes, how? a. A snack food factory in the Tuas area of Singapore employs 100 workers and 20 machines. Currently the marginal product of labor is $6 and that of capital is $15. Assuming that the market prices for labor and capital are $3 and $25 respectively; answer the following: Is the firm maximizing profits? b. Should the firm change its use of labor and capital? If yes, how? a.

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In economics profit maximization occurs when a firm produces at a level where the marginal cost equals the marginal revenue When we talk about the marginal product of ... View the full answer