If a firm used only two factors of production,labor (L)and capital (K),which of the following conditions would be present if the firm was minimizing its cost of production?
A)MPL ¸ PL = MPK ¸ PK
B)MPL ´ PL = MPK ´ PK
C)MRPL = MRPK
D)MPL = MPK

Question

Quizplus · Accepted Answer

MPL/PL = MPK/PK represents the condition of cost minimization when a firm uses only two factors of production, labor (L), and capital (K). This equation indicates that the marginal product per dollar spent on labor should be equal to the marginal product per dollar spent on capital. By satisfying this condition, the firm can achieve the most efficient combination of inputs and minimize its production costs.

If a Firm Used Only Two Factors of Production,labor (L)and