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

question 16

Multiple Choice

By expressing the cost-minimizing condition as MPK/MPL = PK/PL, we are able to see 68)

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

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