Under the marginal productivity principle,
A)the marginal economic profit of all inputs is zero at their optimal levels.
B)the marginal physical product of each input is equal at their optimal levels.
C)the marginal revenue product of each input is equal at their optimal levels.
D)the slope of the marginal revenue product curve for each input is zero at the optimal level.

Question

Quizplus · Accepted Answer

The marginal productivity principle suggests that at the optimal levels of input use, the marginal economic profit of all inputs is zero. This is because, at the optimal point, the cost of adding one more unit of input (marginal cost) equals the additional revenue generated by that unit (marginal revenue), leading to zero marginal economic profit for the last unit added.

Under the Marginal Productivity Principle