Question: Suppose that the MPl = 50 and the per unit price of labor is 25. The MPk = 100 and the per unit price of

Suppose that the MPl = 50 and the per unit price of labor is 25. The MPk = 100 and the per unit price of capital is 25.

  1. Is this firm minimizing the cost of producing a given level of output?
  2. If the firm is not minimizing the cost of producing the given amount of output, what should this firm do?

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