In the long run
A)all inputs are fixed.
B)a firm is making the optimal input choice when the marginal rate of technical substitution is equal to the input price ratio.
C)the expansion path shows how the input marginal products change as the firm's output level changes.
D)both a and b
E)none of the above

Question

Quizplus · Accepted Answer

In the long run, a firm is making the optimal input choice when the marginal rate of technical substitution is equal to the input price ratio. This means that the firm is achieving the most efficient combination of inputs to produce a given level of output, taking into account the prices of those inputs.

In the Long Run