Question

According to the principle of 'equi-marginal returns' in farm management, a farmer allocating a limited quantity of a scarce input, such as capital, among several competing farm enterprises will achieve the most efficient (optimum) allocation when the input is distributed such that:

Q: Answer-According to the principle of 'equi-marginal returns' in farm management, a farmer allocating a limi...

The principle of equi-marginal returns states that a farmer achieves the optimum allocation of a limited, scarce input among several competing enterprises when the marginal return from the last unit allocated to each enterprise is equal across all enterprises, since any imbalance would allow increased total returns by reallocating input toward the higher marginal-return enterprise.