Solving for the value of the Lagrange multiplier in the firm's cost minimization problem tells us:
A) average cost.
B) total cost.
C) marginal cost.
D) variable cost.

Question

Quizplus · Accepted Answer

The Lagrange multiplier in the context of a firm's cost minimization problem represents the change in the objective function (total cost) for a one-unit change in the constraint (output level). Therefore, it corresponds to the marginal cost, which is the cost of producing one additional unit of output.

Solving for the Value of the Lagrange Multiplier in the Firm's