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A company operates plants in both the United States where capital is relatively cheap and labor is relatively expensive and Mexico where labor is relatively cheap and capital is relatively


A company operates plants in both the United States (where capital is relatively cheap and labor is relatively expensive) and Mexico (where labor is relatively cheap and capital is relatively expensive).

a. Why is it unlikely that the cost-minimizing factor choice will be identical between the two plants? Explain.

b. Under what circumstances will the input choice be relatively similar?

May 01 2020 View more View Less

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