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Instructed to Choose the Combination of Inputs That Minimizes the Cost

Question 20

Multiple Choice

Instructed to choose the combination of inputs that minimizes the cost of producing 2,000 pan-head screws,your assistant returns with the startling news that the Lagrangian multiplier is $0.10.From this you conclude that:


A) costs have not been minimized.
B) the average cost of producing screws at 2,000 units is $0.10.
C) the marginal cost of producing screws at 2,000 units is $0.10.
D) marginal cost equals average cost.
E) the price of the screws must be $0.10.

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