Explore BrainMass

Explore BrainMass

    optimal combination of capital and labor

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A producer is hiring 20 units of labor and 6 units of capital (Bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. The producer is
    a. using the optimal combination of capital and labor
    b. should use more capital and less labor
    c. should use more labor and less capital
    d. cannot determine without more information

    © BrainMass Inc. brainmass.com March 4, 2021, 8:15 pm ad1c9bdddf

    Solution Preview

    You cannot determine the answer with the information given. The optimal combination of labor and capital is determined by the ...