The Acme Company Is a Perfect Competitor in Its Input

question 80

Multiple Choice

The Acme Company is a perfect competitor in its input markets and a monopolist in its output market. Its average product of labor is 30, the marginal product of labor is 20, the price of labor is $20, and the price of the output is $5. For Acme Company, the marginal revenue product of labor:

• A) is $100.
• B) is $150.
• C) is $400.
• D) is $600.
• E) cannot be determined with the information provided.

Understand the significance of critical analysis within sociological theory, specifically regarding narratives and identity.

Understand the concept of scarcity and its significance in economics.

Recognize the different types of resources and their roles in production.

Distinguish between goods and services.

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Definitions:

Basic Earning Power

An indicator of a company's profitability from operations, expressed as EBIT (Earnings Before Interest and Taxes) divided by total assets.

Total Assets

The sum of all current and non-current assets owned by an entity as reported on the balance sheet.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Debt/Assets Ratio

A financial ratio that indicates the proportion of a company's assets that are financed by debt.