The first-order conditions for maximizing profits, $\pi$ = P x F(K,L) - w_L - r_K, are A)P x {$\partial$F(K,L) / $\partial$K} - r = 0 and P x {$\partial$F(K,L) / $\partial$L} - w = 0. B)P x MPK - r = 0 and P x MPL - w = 0. C)VMPK = r and VMPL = w. D)all of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

The first-order conditions for profit maximization involve setting the value of the marginal product of capital (VMPK) equal to the rental rate (r) and the value of the marginal product of labor (VMPL) equal to the wage rate (w). All the given statements are different ways of expressing these conditions.

The First-Order Conditions for Maximizing Profits π\piπ = P X F(K,L) - WL - RK, Are A)P

The First-Order Conditions for Maximizing Profits $\pi$ = P X F(K,L) - W_L - R_K, Are
A)P