After a firm makes both short and long run adjustments to its production plan following an increase in the output price,
A)the marginal product of capital will be higher.
B)the marginal product of labor will be lower.
C)the technical rate of substitution will be unchanged.
D)(a) and (c)
E)(b) and C
F)(a) and (b)
G)All of the above.h.We cannot tell for sure -- so none of the above.

Question

Quizplus · Accepted Answer

After a firm makes both short and long run adjustments to its production plan following an increase in the output price, the effects on the marginal product of capital, the marginal product of labor, and the technical rate of substitution can vary depending on the specifics of the production function and the nature of the adjustments. Therefore, we cannot definitively determine the changes in these variables without more information.

After a Firm Makes Both Short and Long Run Adjustments