For a firm with more than one source of output with differing cost structures, its ________ will be minimized when its ________ are equalized across sources.

Question

Quizplus · Accepted Answer

C) Total production costs will be minimized when marginal production costs are equalized across sources. This is based on the principle of equi-marginal utility in economics, which states that to minimize costs or maximize utility, a firm should allocate resources in such a way that the marginal cost of production is the same for all sources of output.

For a Firm with More Than One Source of Output