A Firm Can Profitably Introduce a New Activity If and Only

question 27

Multiple Choice

A firm can profitably introduce a new activity if and only if:

• A) the activity's direct benefit exceeds its opportunity cost.
• B)the activity's direct benefit equals its opportunity cost.
• C) all the constraints become nonbinding.
• D) the slope of the resource constraint equals the slope of the objective function.
• E) the shadow price of any one of the resources becomes zero.