If a Firm Is Using a Resource Hired in a Perfectly

question 117

Multiple Choice

If a firm is using a resource hired in a perfectly competitive market, and if the marginal resource cost is less than its marginal revenue product,

• A) more of the resource should be used.
• B) less of the resource should be used.
• C) the firm should pay a lower price for the resource.
• D) the firm should pay a higher price for the resource.
• E) the firm is using the optimal amount of the resource.

---

Definitions:

Termination

The act of ending the employment of an employee or the conclusion of an agreement or contract.

Turnover

Occurs when employees quit or are fired and must be replaced by new employees.

Incentive System

A structured plan designed to motivate and encourage specific behaviors or actions among a group of people or employees.