A Perfectly Competitive Firm Is Hiring Variable Resources M and N

question 285

Multiple Choice

A perfectly competitive firm is hiring variable resources M and N. It will minimize total costs

• A) MRPm/MFCm = MRPn/MFCn.
• B) MRPm ∗ MFCm = MRPn ∗ MFCn.
• C) Pm/MPPm = Pn/MPPn.
• D) MPPm/Pm = MPPn/Pn.

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Definitions:

Variable Cost

Expenses that vary directly with the volume of products or services a company generates.

Total Cost

Represents the complete sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

ATC

Average Total Cost, refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to any change.