To determine the revenue-maximizing combination of outputs to produce, a manager must know:

Question

Quizplus · Accepted Answer

To maximize revenue, the manager needs to produce the combination of outputs where the marginal revenue product of each input is equal to its price, which is equivalent to setting the marginal rate of product substitution (MRPS) equal to the price ratio of the outputs. Therefore, the manager needs to know the MRPS and the product price ratio to determine the revenue-maximizing combination of outputs to produce.

To Determine the Revenue-Maximizing Combination of Outputs to Produce, a Manager