A fashion firm makes outfits using two inputs, design skills( L) and expensive materials (M). The cost of fabrication is small and may be ignored as a first approximation. At current output levels, the unit input costs are: CL =£20 and CM =£4. The marginal products are: MPL =50: MPM =8.
Is the firm operating efficiently i.e. is it producing the current output at minimum cost? If not what changes should it make?© BrainMass Inc. brainmass.com March 4, 2021, 8:09 pm ad1c9bdddf
No, at these rates the firm is not operating efficiently. For producing ...
The Cost of Production is examined.