By Expressing the Cost-Minimizing Condition as MP_K/MP_L = P_K/P_L,we Are

question 137

Multiple Choice

By expressing the cost-minimizing condition as MP_K/MP_L = P_K/P_L,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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