Suppose That a Firm Uses Only Two Inputs in Its

question 47

Multiple Choice

Suppose that a firm uses only two inputs in its production process. The ratio of the marginal products of these inputs always exceeds the ratio of the prices of the inputs. What can you say about the cost-minimizing point of the firm?

• A)It is an interior solution.
• B)A cost-minimizing point must not exist.
• C)If a cost-minimizing point exists, it must be at a corner.
• D)Costs must be negative at the cost-minimizing point.