Author Question: For a firm with only two inputs, capital and labour, the condition MPK/MPL= PK/PLguarantees that the firm is (Read 126 times)

Darron12 · **on:** Oct 12, 2022

Question 1

For many firms, the LRAC curve is U-shaped. The downward-sloping portion of the LRAC curve can be explained by
◦ economies of scale.
◦ rising prices of the fixed factor.
◦ diminishing returns to the variable factor.
◦ diminishing returns to the fixed factor.
◦ decreasing short-run marginal cost.

Question 2

For a firm with only two inputs, capital and labour, the condition MPK/MPL = PK/PL guarantees that the firm is
◦ technically efficient but not economically efficient.
◦ at its profit-maximizing output but is not necessarily minimizing its costs.
◦ minimizing its costs but is not necessarily maximizing its profits.
◦ at its profit-maximizing and cost-minimizing level of output.
◦ economically efficient but not technically efficient.

bleep bloop · **Reply #1 on:** Oct 12, 2022

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