For a given firm, whenever the ratio of marginal product to input price differs across inputs,
A) The market will adjust the price of the higher priced input
B) It will always be possible to make a cost-saving substitution in favor of the input with the lower MP/P ratio (except in the case of corner solutions)
C) It will always be possible to make a cost-saving substitution in favor of the input with the higher MP/P ratio
D) The market will adjust the price of the lower priced input
Correct Answer:
Verified
Q1: The following is true about point A:
A)The
Q2: Suppose labor and capital are both used
Q3: The vertical distance between the total variable
Q5: The variable costs of producing an output,
Q6: Whenever the ratio of marginal products to
Q7: When costs are at a minimum,
A)The ratio
Q8: Given input prices and the usual strategy
Q9: A firm that is trying to produce
Q10: Once we enter the region of diminishing
Q11: Total cost is broken down into two
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents