The equation (MP_L/P_L) = (MP_K/P_K)represents A) profit maximization. B) cost minimization. C) the short-run production function. D) diminishing marginal returns.

Question

Quizplus · Accepted Answer

This equation represents the condition for cost minimization in production, where the marginal product per dollar spent on labor (MP_L/P_L) is equal to the marginal product per dollar spent on capital (MP_K/P_K).

The Equation (MPL/PL) = (MPK/PK) represents

The Equation (MP_L/P_L) = (MP_K/P_K)represents