A firm obeys the least-cost rule by equating the ratios of marginal physical product to the factor price.
The marginal physical product refers to the adjustment in the quantity of aggregate item yields that outcomes from an adjustment in an item input.The marginal physical product identifies with work increments and coming about profitability increments, in economics.
Factor price refers to the cost at which the methods for creation (that is, arrive, work, capital and sometime business enterprise) are sold.
