A Profit-Maximizing Firm Will Hire Extra Units of a Resource

question 192

Multiple Choice

A profit-maximizing firm will hire extra units of a resource when

• A)marginal resource cost exceeds marginal revenue product
• B)marginal resource cost is equal to marginal revenue product
• C)marginal resource cost is less than marginal revenue product
• D)temporary resource price differentials exceed the marginal resource cost
• E)the average resource cost and marginal resource cost curves are equal

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Definitions:

Negotiable

A term referring to a document or financial instrument that can be transferred from one party to another, providing the holder with certain rights.

Exchange

A marketplace or platform where goods, services, or financial instruments are traded between parties.

Negotiable Instrument

A signed document that promises a specified sum of money to a specific person or entity and is transferable to others.

Substitute

A person or thing acting or serving in place of another, often used in employment or ingredient contexts.