"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. Firms aim to hire any factor of production up to the point where the value of the factor's marginal product equals the factor's price, as this is the point of optimal use of the factor for the firm.

"The Firm Hires the Factor Up to the Point Where