A Condition for the Profit-Maximizing Use of Any Factor of Production

question 61

Multiple Choice

A condition for the profit-maximizing use of any factor of production is
Where MP = marginal product, w = the price of a factor of production, p = price of one unit of the firmʹs output, MR = marginal revenue, MC = marginal cost, MRP = marginal revenue product) :

• A) MRP = MP × p
• B) MR = MRP P
• C) MC = MR × w
• D) w = MP × p
• E) MRP = MR × MC

---

Definitions:

Operating Line of Credit

A flexible loan from a bank that provides a maximum loan balance that the borrower can access for its short-term capital needs.

Company's Liquidity

An indicator of a company's ability to meet its short-term financial obligations, ensuring it has enough cash or liquid assets.

Interest (Finance) Expenses

Costs incurred by an entity for borrowed funds; these expenses may include the cost of debt or loan interest payments.

Statement of Income

A financial report that shows a company's revenue and expenses over a specific period, revealing the net profit or loss.