What actions should they take with regard to employment

Reference no: EM131505059

Question: A firm uses labour and capital to produce output, X. A new manager is appointed, who notes that, while each worker costs £5 per week and the weekly rental price of capital is £10, the marginal product of capital is 200 units of output per week. Can the manager conclude that the firm is minimising costs? If not, what actions should they take with regard to employment, the capital stock and output in order to rectify the situation?

Reference no: EM131505059

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