The Lester-Machlup controversy applies to whether or not firms
A) choose the correct plant size
B) use marginal analysis to choose output levels
C) correctly calculate their economic profits and losses
D) engage in wasteful advertising campaigns
E) pollute the environment

Question

Quizplus · Accepted Answer

The Lester-Machlup controversy revolves around the debate on whether firms use marginal analysis to decide on their output levels. Machlup argued in favor of marginal analysis as a decision-making tool, while Lester questioned its practical application by firms.

The Lester-Machlup Controversy Applies to Whether or Not Firms