A plant is located at the cost- minimizing location when the marginal benefit of moving closer to the inputs is______ the marginal cost.
A)exactly double
B)greater than
C)equal to
D)less than

Question

Quizplus · Accepted Answer

At the cost-minimizing location, the marginal benefit of moving closer to the inputs is equal to the marginal cost. This means that any further increase in proximity to the inputs would result in a decrease in the marginal benefit, which would lead to an increase in costs, and hence the plant would not be at the optimal location. Therefore, the only option that satisfies this condition is C) equal to.

A Plant Is Located at the Cost- Minimizing Location When