To maximize its profit for a particular quantity of output,a firm should equate the
A) total amount spent on each of its inputs.
B) marginal product of each of its inputs.
C) average product of each of its inputs.
D) marginal product with the average product of each of its inputs.
E) marginal product of a dollar's worth of each input.

Question

Quizplus · Accepted Answer

To maximize profit, a firm should ensure that the last dollar spent on any input yields the same amount of additional output across all inputs. This is achieved by equating the marginal product per dollar spent on each input, which ensures the most efficient allocation of resources.

To Maximize Its Profit for a Particular Quantity of Output,a