Which of the Following Conditions Indicate Cost Minimization,assuming Two Inputs,labour

question 88

Multiple Choice

Which of the following conditions indicate cost minimization,assuming two inputs,labour (L) and capital (K) ?

• A)P_K ∙ MP_K = P_L ∙ MP_L
• B)MP_L = MP_K
• C)MP_K/P_K = MP_L/P_L
• D)MP_K/P_L = MP_L/P_K
• E)P_K = P_L

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Definitions:

Purchasing power

The worth of a currency measured by how many goods or services one unit of it can purchase.

Perpetual fund

A type of investment fund with no fixed termination date, allowing investors to contribute and withdraw capital indefinitely.

Compounded annually

Interest on a deposit or loan calculated once per year, where each year's interest is added to the principal.

Semi-annual compounded

Interest on an investment is calculated twice a year and added to the principal.