At an interior solution to the long-run cost-minimization problem, the firm adjusts input quantities so that the

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At an interior solution to the long-run cost-minimization problem, the firm adjusts input quantities so that the marginal rate of technical substitution equals the ratio of the input prices. Equivalently, the ratio of the marginal product of one input to its price equals the corresponding ratio for the other inputs.

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Microeconomics

ISBN: 9780470563588

4th Edition

Authors: David Besanko, Ronald Braeutigam

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