Economic efficiency is achieved when all firms equate the marginal:

Question

Quizplus · Accepted Answer

Economic efficiency is achieved when the revenue product (marginal revenue product) is equal to the price for all inputs. This means that the firm is maximizing its profits by using the optimal combination of inputs and producing the optimal amount of output. Equating the cost of all inputs (option B) would not necessarily lead to economic efficiency as the firm may not be maximizing its profits. Option A is incorrect as it refers to the marginal product of inputs, which may not necessarily lead to economic efficiency. Option D is also incorrect as it refers to the product of all inputs rather than the revenue product.

Economic Efficiency Is Achieved When All Firms Equate the Marginal