If the Price of a Unit of Output for a Perfectly

question 115

Multiple Choice

If the price of a unit of output for a perfectly competitive firm is $5 and the profit-maximizing condition is met, then MP_L/P_L = MP_K/P_K = MP_A/P_A will be equal to

• A) $5.
• B) $1.67.
• C) $0.20.
• D) $0.05.

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Definitions:

Prohibition

The legal act of prohibiting the manufacture, transportation, and sale of alcohol, most notably implemented in the United States from 1920 to 1933.

Republicans

A political party in the United States that traditionally champions conservative ideologies, including limited government, lower taxes, and a free-market economy.

Northern Democrats

A faction of the Democratic Party in the United States before the Civil War, mainly based in the North, known for their diverse views on slavery.

Placidity

A state of calmness and tranquility, often describing a peaceful and undisturbed environment or demeanor.