The equation (MP L /P L ) = (MP K /P K ) representsA) profit maximization.B) cost minimization.C) the short-run production function.D) diminishing marginal returns.

Question

The equation (MP L /P L )  = (MP K /P K )    representsA)  profit maximization.B)  cost minimization.C)  the short-run production function.D)  diminishing marginal returns.

Aliyah Johnson · Accepted Answer

Final Answer : B, Explanation :  This equation represents the condition for cost minimization in production, where the marginal product per dollar spent on labor (MP_L/P_L) is equal to the marginal product per dollar spent on capital (MP_K/P_K).

The equation (MP_L/P_L) = (MP_K/P_K) represents

A) profit maximization.
B) cost minimization.
C) the short-run production function.
D) diminishing marginal returns.

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Learning Objectives

Related questions

The equation (MPL/PL) = (MPK/PK) representsA) profit maximization.B) cost minimization.C) the short-run production function.D) diminishing marginal returns.

Definitions

Learning Objectives

Learning Objectives

Related questions

The equation (MP_L/P_L) = (MP_K/P_K) represents

A) profit maximization.
B) cost minimization.
C) the short-run production function.
D) diminishing marginal returns.