A Firm Operates at Its Least-Cost Position for a Given

question 68

Multiple Choice

A firm operates at its least-cost position for a given level of output by equating

• A)the marginal product of each factor.
• B)the marginal product per dollar spent for each factor.
• C)the price of each input.
• D)the total expenditure on each input.
• E)the average product for each factor.

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Definitions:

Decision Alternatives

Different courses of action that can be taken in a decision-making process to achieve a specific goal or solve a particular problem.

Future Demands

The anticipated requirements or needs in upcoming periods, often used in planning and forecasting in various fields such as market trends, technology, and resource allocation.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Net Present Value

A financial metric used to estimate the value of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.