Question

Suppose that the marginal product of the last worker employed by the Delicious Ice Cream Company is 300 units of output per day and the daily wage that the firm must pay is $50, while the marginal product of the last ice cream machine that the firm rents is 200 units of output per day and the daily rental price of the machine is $25?

(a) In the firm maximizing output or minimizing output?

(6) How can the firm maximize output or minimize costs?​

Answer 1

Answer:

• it is minimising the output (from 300 to 200). But at the same time minimising the cost as well.
• output can be maximized by using good quality machines or low-cost labours this will also minimise the cost