Instructed to Choose the Combination of Inputs That Minimizes the Cost

question 20

Multiple Choice

Instructed to choose the combination of inputs that minimizes the cost of producing 2,000 pan-head screws,your assistant returns with the startling news that the Lagrangian multiplier is $0.10.From this you conclude that:

• A) costs have not been minimized.
• B) the average cost of producing screws at 2,000 units is $0.10.
• C) the marginal cost of producing screws at 2,000 units is $0.10.
• D) marginal cost equals average cost.
• E) the price of the screws must be $0.10.