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According to the text there appear to be very limited opportunities for input substitution in the production of fire protection services. Which of the following is the most plausible explanation for this observation?
Answer
The marginal productivity of additional firefighters is zero.
It requires a fixed amount of labor to man each fire truck that is employed to produce fire protection.
The marginal productivity of the capital used in firefighting is much more expensive than the labor inputs.
Capital costs have made it too expensive to hire more firefighters.
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