The input efficiency condition:
A) holds if at least one pair of firms share the same marginal rate of technical substitution between every pair of inputs.
B) holds if at least one pair of consumers share the same marginal rate of substitution between two goods.
C) holds if every pair of firms share the same marginal rate of technical substitution between every pair of inputs.
D) holds if every pair of firms share the same marginal rate of substitution between two goods.

Question

Quizplus · Accepted Answer

The input efficiency condition holds if every pair of firms share the same marginal rate of technical substitution between every pair of inputs. It ensures that no firm is using inputs in a less efficient way than its rival firms.

The Input Efficiency Condition