What valid conclusion can be drawn about effect and reasons

Reference no: EM133614600

Problem: A firm faces the following costs: total cost of capital = $4,000; price paid for labor = $20 per labor unit; and price paid for raw materials = $8 per raw-material unit. Initially, the firm can produce 2,000 units of output by combining its fixed capital with 200 units of labor and 500 units of raw materials. After the firm improves its production process, it can produce 3,000 units of output by combining its fixed capital with 100 units of labor and 400 units of raw materials. What valid conclusion can be drawn about the effect and reasons for the change?

Reference no: EM133614600

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