The profit-maximizing and the least-cost combination of inputs are:
A) the result of unrelated decisions.
B) always identical.
C) such that the minimization of costs always results in profit maximization.
D) such that the maximization of profits always entails the least-cost combination of inputs.

Question

Quizplus · Accepted Answer

The maximization of profit entails the comparison of the marginal revenue with the marginal cost. In determining the least-cost combination of inputs, the objective is to minimize the marginal cost of production. As such, the two decisions are related since minimizing costs is a means of maximizing profit. Therefore, the answer is D, which states that the maximization of profits always entails the least-cost combination of inputs.

The Profit-Maximizing and the Least-Cost Combination of Inputs Are