A small bakery is deciding whether to hire an additional baker or invest in a new oven to increase production. If the marginal product of labor (additional output from hiring another baker) is equal to the marginal product of capital (additional output from the new oven), what should the bakery consider doing to minimize costs while maximizing output?

The bakery should consider the costs and benefits of both options to determine which will help them produce more efficiently. If the additional output from hiring a new baker is equal to the output from investing in a new oven, they should look at the costs of hiring a baker versus buying an oven. For example, if hiring a baker costs $2,000 per month and the new oven costs $5,000, they need to assess how much additional bread each option produces and whether the higher initial cost of the oven leads to greater long-term savings. Ultimately, the bakery should choose the option that provides the most output for the least cost over time. This way, they can ensure they are using their resources wisely while meeting customer demand.