Whenever the ratio of marginal products to input prices differs across inputs,

A. no change will necessarily follow because the process could still be at peak efficiency.
B. a firm's costs could be reduced by shifting input usage toward the input with the lower marginal product to price ratio.
C. the marginal products of inputs will adjust as input combinations change to correct for the inefficiency.
D. the costs of the inputs adjust to bring the marginal product ratios and cost ratios together.


Answer: C

Economics

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