Suppose we are given a Firm's Marginal product of capital and the marginal product of labor at...
Question:
Suppose we are given a Firm's Marginal product of capital and the marginal product of labor at the combination of labor and capital that the firm currently uses. Can we determine the Firm's marginal rate of technical substitution of labor for capital at the combination that is currently being used?
Factors of Production:
The term factors of production in economics and production theory can be defined as those variable inputs that help a firm to manufacture its final output. Thus, these factors play an intermediary role in the production process.
Answer and Explanation: 1
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View this answerYes, we can determine the value of the marginal product of technical substitution (MRTS) with the help of the given level of marginal product of...
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Marginal Rate of Substitution: Definition, Formula & Example
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Chapter 3 / Lesson 51
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Learn how to calculate the marginal rate of substitution and its application in economics. View examples of the formula in use with real world application.
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