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
Q2: Given input prices and the usual strategy
Q3: The total fixed cost curve
A)varies with the
Q4: Whenever the ratio of marginal products to
Q5: The following is true about point A
Q6: Assume initially this firm is at point
Q7: Output for a simple production process is
Q8: The short run total cost of zero
Q9: The vertical distance between the total variable
Q10: A firm that is trying to produce
Q11: The vertical distance between the average variable
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