How optimal firm behavior will lead to substitution effects

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Using a non-numerical example, explain how firms should decide how many employees to hire. Your example should be original -- not one from the textbook or my lecture. Make sure response explains how optimal firm behavior will lead to scale and substitution effects. Also explain the importance of the diminishing marginal returns assumption. also please try to explain as much as you can the more explainations the better.

Reference no: EM13235646

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