True, false or uncertain? Explains your answers please. a.The marginal product of an input to production...

True, false or uncertain? Explains your answers please. a.The marginal product of an input to production can never be negative b.A monopoly equates price to marginal cost to find the optimal quantity to produce. c.A competitive firm equates marginal revenue to price to find the optimal quantity to produce.

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Expert Solution

(a) The marginal product of an input to production can never be negative. (FALSE)

The marginal product of an input is negative in 3rd stage of factor of production.

(b) A monopoly equates price to marginal cost to find the optimal quantity to produce. (FALSE)

A monopoly equates marginal revenue to marginal cost to find the optimal quantity to produce.

(c) A competitive firm equates marginal revenue to price to find the optimal quantity to produce. (FALSE)

A competitive firm equates Price to marginal cost to find the optimal quantity to produce. In competitive market price and marginal revenue is same. So, in other words we can say that a competitive firm equates marginal revenue to marginal cost to find the optimal quantity to produce.

Rahul Sunny answered 2 years ago

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