A profit-maximizing producer employs each factor of production up to the point at which the value of the marginal product of the last unit of the factor employed is equal to the price per unit of output.

Question

Quizplus · Accepted Answer

A profit-maximizing producer employs each factor of production up to the point at which the value of the marginal product of the last unit of the factor employed is equal to the factor's price, not the price per unit of output.

A Profit-Maximizing Producer Employs Each Factor of Production Up to the Point