Consider a Firm in the Long Run That Is Trying

question 91

Multiple Choice

Consider a firm in the long run that is trying to maximize its profits.It should

• A)minimize the cost of producing whatever level of output it chooses.
• B)charge the lowest price possible given the minimum possible cost.
• C)maximize the marginal product of all factors of production.
• D)charge the highest price.
• E)select the most technically efficient method of production regardless of the level of production.

Analyze the substitution and output effects of changes in resource prices.

Understand the complementarity and substitutability of inputs in production.

Understand how to determine the optimal number of units of land, labor, and capital to hire based on Marginal Revenue Product (MRP) and factor costs.

Analyze the conditions under which a firm is considered a perfect or imperfect competitor in the labor market.

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