"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?
A)labor only
B)land only
C)capital only
D)land, labor, and capital

Question

Quizplus · Accepted Answer

This statement applies to all factors of production (land, labor, and capital) as it is a basic principle of profit-maximization in production theory that firms hire factors up to the point where the value of their marginal product equals their price.

"The Firm Hires the Factor Up to the Point Where