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Firm making the right decision

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A firm is making a long-run planning decision about the optimal size of a new plant and its labor force. It decides to build a medium-sized plant and hire 100 workers. Engineering estimates suggest that at those levels, the marginal product of capital will be 100 and the marginal product of labor will be 75. If the wage rate is $5 and the rental rate on capital is $10, is the firm making the right decision?

Reference no: EM131071130

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