Illustrate what is the least-cost input-combination of labor

Reference no: EM1335511

Finding least-cost input-combination of labor and capital

Use the following data for a firm's output at various levels of employment (L) to calculate:

Number of Workers (L) Output (Q)
1 100
2 300
3 600
4 850
5 1000
6 1100

a) Its marginal physical product of labor (MPPL) schedule;

(b) Its (MPPL/MRCL) schedule, given a fixed wage (W = MRCL) of $25 per hour per worker.

(c) Assuming that capital (K) is held constant at 2 machines and MPPK/MRCK = 10, what is the least-cost input-combination of labor and capital and how much output is produced with that set of resources?

Reference no: EM1335511

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