Efficient combination of capital and labor levels when

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Reference no: EM131112547

A firm using two inputs (call them “capital” and “labor”) has an efficient combination of capital and labor levels when:

the marginal product of capital and the marginal product of labor are equal.

the price of capital and the price of labor are equal.

the ratio of the marginal product of capital over the marginal product of labor equals the ratio of the price of labor over the price of capital.

Reference no: EM131112547

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