A firm using two inputs,X and Y,is using them in the most efficient manner when
A)MPx = MPy.
B)Px = Py and MPx = MPy.
C)MPx/Py = MPy/Px.
D)MPx/MPy = Px/Py.

Question

Quizplus · Accepted Answer

A firm is using inputs efficiently when the ratio of the marginal products (MP) of the inputs equals the ratio of their prices (P), which is the condition for cost minimization in production.

A Firm Using Two Inputs,X and Y,is Using Them in the Most