If a firm is producing at minimum cost using positive amounts of two inputs, an increase in the price of input one will cause
A)a decrease in the marginal rate of technical substitution
B)an increase in the marginal product of input one
C)a decrease in the absolute value of the slope of the isocost
D)a decrease in the marginal product of input one

Question

Quizplus · Accepted Answer

An increase in the price of input one will lead the firm to use less of it, which typically increases its marginal product due to the law of diminishing returns.

If a Firm Is Producing at Minimum Cost Using Positive