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Microeconomics

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Moderate

One Input, Profit Maximization Equation

MICRO-STRH5J

Given production function $y=f(L)$, where $y$ is the amount of output and $L$ is the amount of labor input. With price $p$ and labor wage $w$, which of the following represents the profit-maximizing equation for a firm?

Let $f'(L)$ mean the derivative of the production function with respect to $L$.

A

$pf(L) = wL$

B

$pf(L) = w$

C

$p = wL$

D

$pf'(L) = wL$

E

$pf'(L) = w$

F

$f'(L) = wL$