A firm achieves least-cost in production by substituting factors until?

  • A their prices are equal
  • B the ratio of their marginal -physical-products equals the ratio of their prices
  • C their marginal -physical-products are each equal to their factor prices
  • D their marginal -physical-products are each equal to zero

The correct answer is B. the ratio of their marginal -physical-products equals the ratio of their prices

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