currently the process is using 100 units of K(CAPITAL) & 121 units of L(LABOUR). given the very specialized nature of capital equipment kit takes about a year to increase K;but the rate of labour inputLcan be varied daily. if the wage rate is $10 per unit & the output is $2 per unitis the firm operating efficiently in the short run ? if notexplain why. also determine the optimal rate of labour input. on what factors does the labour-ef
the marginal product of labour in a production process is statistically estimated as MPL=10(K/L)^0.5currently the process is using 100 units of K(CAPITAL) & 121 units of L(LABOUR). given the very specialized nature of capital equipment kit takes about a year to increase K;but the rate of labour inputLcan be varied daily. if the wage rate is $10 per unit & the output is $2 per unitis the firm operating efficiently in the short run ? if notexplain why. also determine the optimal rate of labour input. on what factors does the labour-efficiency depend?
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