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If MPa / Pa = MPb / Pb and MRPa

Question 64

Multiple Choice

If MPa / Pa = MPb / Pb and MRPa / Pa = MRPb / Pb > 1, this firm is


A) producing its output with the least costly combination of resources but is not producing the profit-maximizing output.
B) maximizing profits but failing to minimize costs.
C) neither maximizing profits nor minimizing costs.
D) combining resources a and b so as to minimize costs and maximize profits.

Correct Answer:

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