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A software company in Silicon Valley uses programmers (labor) and computers (capital) to p

A software company in Silicon Valley uses programmers (labor) and computers (capital) to p

A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should:

a. Increase labor while decreasing capital.

b. Decrease labor while increasing capital.

c. Keep the current amounts of capital and labor just as they are.

d. None of the above.

Abhinav 05-Dec-2019

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