Answer the question using the following data, which show all available techniques for producing 20 units of a particular commodity If a new production technique is developed that enables a firm to produce 20 units of output with 3 units of land, 3 of labor, 1 of capital, and 2 of entrepreneurial ability, this technique would
A) not be adopted because, although it reduces production costs, it does not increase profit.
B) be adopted because it would lower production costs and increase economic profit.
C) not be adopted because it entails higher production costs than other available techniques.
D) be adopted, even though economic profits would be reduced slightly.

Question

Answer the question using the following data, which show all available techniques for producing 20 units of a particular commodity  If a new production technique is developed that enables a firm to produce 20 units of output with 3 units of land, 3 of labor, 1 of capital, and 2 of entrepreneurial ability, this technique would
A) not be adopted because, although it reduces production costs, it does not increase profit. 
B) be adopted because it would lower production costs and increase economic profit. 
C) not be adopted because it entails higher production costs than other available techniques. 
D) be adopted, even though economic profits would be reduced slightly.

Quizplus · Accepted Answer

The new production technique uses fewer units of factors of production than any of the other available techniques. This means that it would lower production costs and increase economic profit, as stated in choice B. Therefore, it is likely that the firm would adopt this new technique.

Answer the Question Using the Following Data, Which Show All