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Sergeeva-Olga [200]
3 years ago
9

Which of the following identifies the optimal usage of inputs by a profit-maximizing firm?

Business
1 answer:
Anna [14]3 years ago
6 0

Answer:

Marginal cost of labor = marginal cost of capital

Explanation:

The general rule says that the firm maximizes profit when it produce the quantity of output where marginal revenue is equal to marginal cost.

You can also approach the profit maximization issue from the input side, that means: what is the profit maximizing usage of the variable input?  In order to maximize profit, the firm should increase its usage of the input up to the point where the input's marginal revenue product is equal to its marginal costs.

This is the profit maximizing rule (mathematically) MRPL = MCL

L: is a subscript and it refers to the variable "labor"

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