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The Equilibrium Condition for Producers (I

Question 6

Multiple Choice

The equilibrium condition for producers (i.e., the condition that exists when the isocost Line is tangent to an isoquant) is __________.

A) (MPP_L/r) = (MPP_K/w)
B) (MPP_L/MPP_K) = (w/r)
C) (MU_B/MU_A) = (P_B/P_A)
D) (MU_B/P_A) = (MU_A/P_B)

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