Is your little shop using its inputs efficiently

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Reference no: EM131095209

You own a pizza shop and you use both labor and capital to make your pizzas. Currently the marginal product of labor is 5 pizzas per hour, while the marginal product of you capital is 2 pizzas per hour. You pay your labor $10 per hour, and your capital costs you $5 per hour. The price of pizza is $2.50. Is your little shop using its inputs efficiently? Explain.

Reference no: EM131095209

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