A firm's marginal product of labour is 4 and its marginal product of capital is 5. If the firm adds one…
Along an isoquant, total output remains unchanged when \(MP_L \cdot \Delta L + MP_K \cdot \Delta K = 0\). Given \(MP_L = 4\), \(MP_K = 5\), and \(\Delta L = +1\), solving…
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A firm's marginal product of labour is 4 and its marginal product of capital is 5. If the firm adds one unit of labour, but does not want its output to change, the firm should
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Correct answer B
Along an isoquant, total output remains unchanged when . Given , , and , solving gives , meaning the firm should "use 0.8 fewer units of capital".
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