The equation (MPL/PL) = (MPK/PK) represents
A. cost minimization.
B. profit maximization.
C. the short-run production function.
D. diminishing marginal returns.
Answer: A
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A) the demand for its product must be inelastic. B) it has no control over the price or the quantity sold. C) it must reduce its price to sell more units. D) it will always make a profit.