A firm is producing with the least-cost combination of resources when the
A)last dollar spent on each resource yields the same marginal product.
B)total dollars spent on each resource are all the same.
C)unit prices of the resources are equalized.
D)marginal product of each of the resources is all the same.

Question

Quizplus · Accepted Answer

The least-cost combination of resources occurs when the last dollar spent on each resource yields the same marginal product. This is because, in such a scenario, the firm is allocating its budget in a way that equalizes the marginal benefit (in terms of additional output) per dollar spent across all inputs, ensuring cost efficiency.

A Firm Is Producing with the Least-Cost Combination of Resources