Is the owner of pats pizza restaurant minimizing cost

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Consider the following information below for Pat's Pizza Restaurant and answer the questions below:

Marginal Product of Capital: 4,000
Marginal Produce of Labor: 100
Wage Rate: $10
Rental Price of Pizza Ovens: $500

a) Is the owner of Pat's Pizza Restaurant minimizing cost?

b) Should he rent more ovens and hire fewer workers or rent fewer ovens and hire more workers? Explain.

Reference no: EM13207038

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