Is acme currently employing the optimal amount of capital

Reference no: EM13188347

Acme Container Company produces egg containers that are sold to egg distributors using capital and labor. At Acme the marginal product of labor is: MPL=15 while the marginal product of capital is: MPK=10. Workers at Acme earn $10 hour (w=$10), while Acme's capital rents for $20/hour (r=$20). Is Acme currently employing the optimal amount of capital and labor? If not, what do they need to change so that they are employing the optimal amount of the two inputs?

Reference no: EM13188347

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