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Example Problem #2 of Labor and Capital: We can use production functions to help us figure out the optimal amount of an input to use. Consider a cement company interested in hiring the optimal number of workers per day. Currently, it receives $15/ton for its cement (output price), and pays a typical worker $30/day (input price). Suppose the firm is employing 30 workers, and the marginal product of the 30th worker is 1. What should it do?
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