In the long run,a profit- maximizing firm produces any given level of output by choosing the production method that
A)equates the average cost per unit of all factors.
B)produces that output at the lowest possible cost.
C)is associated with a flat total cost curve.
D)maximizes the marginal product of all factors.
E)equates the marginal product of all factors.

Question

Quizplus · Accepted Answer

A profit-maximizing firm seeks to produce output at the lowest possible cost in the long run, which corresponds to choosing the production method with the lowest average total cost. This is achieved by efficiently allocating and utilizing all inputs to production. Hence, option B is the best choice as it aligns with the objective of profit maximization.

In the Long Run,a Profit- Maximizing Firm Produces Any Given