If a firm is producing a given level of output in an economically efficient manner, then it must be the case that
A) this is the lowest cost method of producing that output.
B) each input is producing its maximum marginal product.
C) this output level is the most that can be produced with the given level of inputs.
D) both a and c
E) none of the above

Question

Quizplus · Accepted Answer

Economically efficient production means that the firm is producing at the lowest possible cost (a) while producing the most output possible with the given level of inputs (c). This implies that the inputs are being utilized in a way that maximizes their marginal product (b). Therefore, both a and c are true in this scenario.

If a Firm Is Producing a Given Level of Output