A firm operates at its least- cost position for a given level of output by equating
A)the average product for each factor.
B)the marginal product of each factor.
C)the price of each input.
D)the total expenditure on each input.
E)the marginal product per dollar spent for each factor.

Question

Quizplus · Accepted Answer

The firm operates at its least-cost position by equating the marginal product per dollar spent for each factor. This means that the firm takes into account the productivity of each factor in relation to its cost and selects the combination of factors that would maximize the firm's output while minimizing its cost. Therefore, choice E is the best answer.

A Firm Operates at Its Least- Cost Position for a Given