Question

Does the firm need to alter its choices of C and L to decrease​ cost? A. ​Yes, they need to increase Upper Lincrease L which would cause MP Subscript Upper LMPL to decreasedecrease and MP Subscript Upper CMPC to increaseincrease. B. ​Yes, they need to increase Upper Cincrease C which would cause MP Subscript Upper LMPL to increaseincrease and MP Subscript Upper CMPC to decreasedecrease. C. ​Yes, they need to increase Upper Lincrease L which would cause MP Subscript Upper LMPL to increaseincrease and MP Subscript Upper CMPC to decreasedecrease. D. ​Yes, they need to increase Upper Cincrease C which would cause MP Subscript Upper LMPL to decreasedecrease and MP Subscript Upper CMPC to increaseincrease. E. ​No, they are producing at the cost minimizing levels of C and L.

Answer 1

Answer:

Yes, they need to increase Upper L which would cause MP Subscript Upper L to decrease and MP Subscript Upper C to increase.

Explanation:

In the specific problem outlined above, the company wants to maximize its revenue and ensure that the production cost is as low as possible for the given quantity of land, cement and the available labor. In order to ensure that this is possible, the company must try to increase the upper L so that there would be an increase in MP (subscript upper C) and a decrease in MP (subscript upper L).