acme widgets, inc. produces widgets by using labor and capital. the price of labor is $5 per unit and the price of capital is $10 per unit. at current output levels, the marginal product of labor is 10 widgets and the marginal product of capital is 40 widgets. to reduce the total cost of producing the current quantity of widgets, how should the firm change its spending on labor and capital?

Respuesta :

The company will alter its spending on labor and capital, which will decrease and rise, to reduce the overall cost of producing the present quantity of widgets.

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