1 a firms marginal rate of technical substitution at m p


1) A firm's marginal rate of technical substitution at

M P L/M P = 3, and the ratio of prices of labor and capital ,w/r, is 4.

a) Is the firm minimizing its cost? Why or Why not?

b) What can it do to improve its situation?

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Business Economics: 1 a firms marginal rate of technical substitution at m p
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