If Only One Firm in an Industry Could Take Advantage

question 97

Multiple Choice

If only one firm in an industry could take advantage of a reduced wage and all other firms continue paying the old wage, how would one best describe the one firm's reaction to this reduced wage assuming labor is the only variable input? The marginal revenue product of labor curve:

• A) would remain unchanged, and the firm would hire more labor at the lower wage.
• B) shifts to the left, and the firm hires more labor at the lower wage on the new curve.
• C) shifts to the right, and the firm hires more labor at the lower wage on the new curve.
• D) shifts to the left, and the firm hires less labor at the lower wage on the new curve.
• E) shifts to the right, and the firm hires less labor at the lower wage on the new curve.

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Definitions:

M-Bromoethylbenzene

A brominated aromatic compound where a bromine atom is attached to the ethyl group which is then attached to the benzene ring at the meta position.

Benzene

A cyclic compound forming the basis for many aromatic substances, distinguished by its unique resonance stability.

Organic Product

A compound or substance that has been synthesized through a chemical reaction involving organic molecules.

Mononitration Product

A compound resulting from the nitration reaction where only one nitro group has been added to a molecule.