As a rule,a profit-maximizing restaurant owner employs each factor of production up to the point at which the value of the marginal product of the _____ unit of the factor employed is _____ that factor's price.
A)first;greater than
B)last;equal to
C)first;equal to
D)last;less than

Question

Quizplus · Accepted Answer

The correct answer is B because in profit maximization, a restaurant owner (or any business) will continue to employ additional units of a factor of production (like labor or capital) until the value of the marginal product (additional output generated by the last unit of the factor) is equal to the cost of employing that factor. This ensures that each factor is used efficiently, contributing to maximum profit without incurring unnecessary costs.

As a Rule,a Profit-Maximizing Restaurant Owner Employs Each Factor of Production