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Agriculture Economics QUESTION #11871
Question 1
The profit-maximizing level of input use occurs where:
  • Marginal Revenue Product equals Marginal Factor Cost, $MRP = MFC$✔️
  • Average Product is at its maximum
  • Total Revenue equals Total Cost
  • Marginal Product equals zero
Correct Answer Explanation
A firm maximizes profit in input space where the added revenue from one more input unit equals its added cost: $MRP = MFC$.