Cost minimization suggests that two inputs should be employed to the point where
ID: 1100306 • Letter: C
Question
Cost minimization suggests that two inputs should be employed to the point where the marginal cost of each input is identical. the marginal revenue product of each input is identical. the extra contribution to physical output of the inputs is identical. the marginal physical product per dollar spent on each input is identical. The marginal revenue product is the change in total output resulting from a one-unit change in variable output. the change in total revenue resulting from a one-unit change in variable input. the change in marginal revenue resulting from a one-unit change in variable input. the change in marginal output resulting from a one-unit change in variable input. As the wage rate rises, other things constant perfectly competitive firms will employ more workers. the same number of workers. fewer workers. less capital. Suppose at the current level of labor used, MRP = $100 and MFC = $100. To maximize profits, the firm should hire more labor. shut down. maintain the current level of labor. reduce the level of labor.Explanation / Answer
A
B
C perfectly competitive firms are price takers then have to work within constraints. cannot raise the price of commodity
C equilibrium condition