Answer to Question #215170 in Microeconomics for Mubashir Ameenudee

Question

‘An increase in output would motivate a cost-minimizing firm to employ more of all

variable inputs.’ Comment.

Answer 1

It is true that an increase in output would motivate a cost-minimizing firm to employ more of all variable inputs so that the output can continue increasing for a given time. An example of a variable input that can be employed is increasing labor.