The cost-minimizing rule is that a firm should utilize inputs such that the marginal physical product of an input divided by the price of the input is the same for all inputs. This is also the profit-maximizing rule because
A) we obtain the profit-maximizing rule by multiplying each ratio by the marginal revenue produced.
B) we obtain the profit-maximizing rule by multiplying each ratio by the product price, which is the same for each input.
C) the profit-maximizing rule is just the inverse of the cost-minimizing rule.
D) they are exactly the same.
B
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Both demand and supply curves usually have positive slopes.
Answer the following statement true (T) or false (F)
Make use of the misperceptions theory to explain why the short-run aggregate supply curve is upward sloping
What will be an ideal response?
Ajax Corporation has just decided to let managers work from home one day a week. This decision will make working conditions better and will
A) cause the demand curve for labor for managers to increase. B) increase the elasticity of demand for labor for managers. C) lead to an increase in the supply curve of labor for managers. D) leave the supply curve of labor unchanged.
This profit-maximizing firm is making a profit or loss of about ________.
A. $200
B. $280
C. $400
D. -$280