If a firm chooses to produce 100 units of output for $150 with 10 units of labor and 12 units of capital, when they could produce the same 100 units for $120 with 10 units of labor and 8 units of capital, the firm is technologically ________ and economically ________.
A) efficient; inefficient
B) inefficient; efficient
C) efficient; efficient.
D) inefficient; inefficient

Question

Quizplus · Accepted Answer

The firm is technologically inefficient because it uses more capital than necessary, and economically inefficient because it incurs higher costs than needed.

If a Firm Chooses to Produce 100 Units of Output