If inputs are combined so that their marginal product-price ratios are equal,________ minimized.
A) costs are
B) profits are
C) production is
D) efficiency is
E) returns are

Question

Quizplus · Accepted Answer

When inputs are combined in such a way that their marginal product-price ratios are equal, it ensures that the cost of production is minimized. This is because the firm is allocating its resources in the most efficient way possible, getting the most output per unit of input without wasting resources or spending more than necessary.

If Inputs Are Combined So That Their Marginal Product-Price Ratios