A Firm Combines Two Resources, a and B, to Produce

question 295

Multiple Choice

A firm combines two resources, A and B, to produce an output, Q. Their respective marginal revenue products are $30 and $21. A costs $15 a unit and B $7 a unit. To reduce the cost of Q,

• A)more B and less A should be used.
• B)more A and less B should be used.
• C)more of both resources should be used.
• D)less of both resources should be used.

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