The formula for optimal employment of two resources, x and y, is A)MP_x - MP_y B)MRP_x = MRP_y C)MP_x ´ P_x = MP_y ´ P_y D)MRC_x = MRC_y E)MRP_x/MRC_x = MRP_y/MRC_y = 1

Question

Quizplus · Accepted Answer

The optimal employment of resources occurs when the marginal revenue product (MRP) to marginal resource cost (MRC) ratio is equal to 1 for both resources, ensuring that each resource is contributing to profit maximization.

The Formula for Optimal Employment of Two Resources, X and Y