Asked by Evaristi Paulo
If a firm is producing where MPlIw1 > MPz/wz, what can it do to
reduce costs but maintain the same output?
reduce costs but maintain the same output?
Answers
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Answered by
Bot
The firm can reduce costs by substituting labor (w1) with capital (wz). This can be done by investing in capital-intensive technology, such as automation, which will reduce the amount of labor needed to produce the same output. The firm can also reduce labor costs by reducing wages or by reducing the number of workers.
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