By Expressing the Cost-Minimizing Condition as MPK/MPL = PK/PL,we Are

question 67

Multiple Choice

By expressing the cost-minimizing condition as MPK/MPL = PK/PL,we are able to see

• A)how the firm determines its profit-maximizing output.
• B)how the firm can adjust the marginal products of the factors of production to the prices of the factors given by the market.
• C)that the capital-labour ratio is fixed.
• D)that the ratio of factor prices is constant over time.
• E)that the firm is producing at a lower cost if the left-hand side of the equation is greater than the right-hand side.

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Definitions:

Tax Liability

The total amount of tax owed by an individual, corporation, or other entity to a taxing authority.

Indemnification

The process by which one party agrees to compensate another for any loss or damage that has occurred or may occur.

Fraud

A wrongful statement, action, or concealment pertinent to the subject matter of a contract knowingly made to damage the other party.