If MP a /P a = MP b /P b and MRP a /P a = MRP b /P b > 1, this firm is:
A. producing its output with the least costly combination of resources but is not producing the
profit-maximizing output.
B. maximizing profits but failing to minimize costs.
C. neither maximizing profits nor minimizing costs.
D. combining resources a and b so as to minimize costs and maximize profits.
Answer: A
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