Figure 4.3: The Production Function
-The solution to the firm's profit maximization is:
A) MPL = w.
B) MPL = w and MPK = r.
C) MPL $\lt$ w and MPK =r.
D) MPL = w and MPK = 0.
E) MPL = w and MPK = r

Question

Figure 4.3: The Production Function 
-The solution to the firm's profit maximization is:
A) MPL = w. 
B) MPL = w and MPK = r. 
C) MPL $\lt$ w and MPK =r. 
D) MPL = w and MPK = 0. 
E) MPL = w and MPK = r

Quizplus · Accepted Answer

The firm's profit is maximized when the marginal product of labor (MPL) equals the wage (w) and the marginal product of capital (MPK) equals the rental rate (r). Therefore, the correct answer is B - MPL F1F1F1S1F1F1F10 w and MPK F1F1F1S1F1F1F10 r.

Figure 43: the Production Function -The Solution to the Firm's

Figure 43: the Production Function
-The Solution to the Firm's