For a Firm with Only Two Inputs,capital and Labour,the Condition

question 76

Multiple Choice

For a firm with only two inputs,capital and labour,the condition MPK/MPL = PK/PL guarantees that the firm is

• A)at its profit- maximizing and cost- minimizing level of output.
• B)minimizing its costs but is not necessarily maximizing its profits.
• C)economically efficient but not technically efficient.
• D)technically efficient but not economically efficient.
• E)at its profit- maximizing output but is not necessarily minimizing its costs.

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Definitions:

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, an indicator used to analyze and compare profitability among companies and industries.

Revenue

Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations.

Absorption Costing

A costing technique that encompasses both direct and indirect expenses associated with the production in the product's cost.

Contribution Margin

The amount by which sales revenue exceeds variable costs of a product, indicating how much revenue contributes toward covering fixed costs and generating profit.