If the price of capital is $24, the price of labor is $15, and the marginal product of capital is...


If the price of capital is {eq}\$24 {/eq}, the price of labor is {eq}\$15 {/eq}, and the marginal product of capital is {eq}16 {/eq}, the least costly combination of capital and labor requires adjusting the amount of labor until its marginal product is equal to _____.

Short Run:

In microeconomics, the short run is a time period where at least one of the producer's resources are unable to be changed. In other words, during the short run, there are fixed costs that will not change if a producer increases or decreases production. In the long run, every type of resource can be changed. This is an important distinction because it is sometimes advantageous to a producer to continue to produce in short-run even if they are losing money. As long as they can cover their variable costs, they should produce in the short run so that some of the revenue goes towards the fixed costs and minimizes the losses.

Answer and Explanation: 1

Become a member to unlock this answer!

View this answer

This problem requires you to use the least cost rule of production. The least-cost rule states that a firm should produce using a resource combination...

See full answer below.

Learn more about this topic:

How to Determine Costs & Make Decisions


Chapter 8 / Lesson 2

Determining the costs in a business and making a decision based on the information that has been collected is how managers look after the financial well-being of their businesses. Learn about making decisions, determining the costs of product lines, special orders, and more.

Related to this Question

Explore our homework questions and answers library