The optimal combination of joint products that are produced in variable proportions is found where
A) the marginal revenue from each product is equal to the marginal cost of producing each product.
B) the isorevenue line is tangent to the product transformation curve.
C) the isorevenue line is tangent to the relevant total cost curve.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

The optimal combination of joint products that are produced in variable proportions is found where the isorevenue line, which represents combinations of products that yield the same revenue, is tangent to the product transformation curve. This curve shows the different combinations of products that can be produced with a given set of resources. The point of tangency indicates the combination of products that maximizes revenue for a given cost.

The Optimal Combination of Joint Products That Are Produced in Variable