A firm uses steel and aluminum to produce auto parts

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A firm uses steel and aluminum to produce auto parts. The current input mix used by the firm is such that the marginal product of aluminum is equal to 800 units, while the marginal product of steel is equal to 500 units. The price of aluminum is $160 per unit and the price of steel is $125 per unit.

Please explain in words what the concept of “ratio of the marginal product of steel to the price of steel” measures.

Reference no: EM131244443

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