To understand the hiring of multiple factors we must consider how the firm combines factors to product output. We need to look a bit more closely at the production process. To do this we use a graphical set up similar to indifference curves used when studying consumer behavior (don't worry if you didn't study that material).

    On the graph to the right we show a some possible input combinations for a firm which employs two factors of production, Labor (L) and Capital (K). Suppose this is a small custom furniture manufacturer which can produce 25 oak chairs each week with 8 units of capital and 9 workers.

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