Suppose a Profit-Maximizing Firm Hires Labour in a Competitive Labour

question 86

Multiple Choice

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour is greater than the wage rate,the firm

• A)increases the wage rate.
• B)decreases the wage rate.
• C)increases the quantity of labour it hires.
• D)decreases the quantity of labour it hires.
• E)shifts to a more labour-intensive production process.

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Definitions:

Communication Gap

The difference or misunderstanding that occurs when the message sent is not interpreted by the receiver in the way that the sender intended.

Communications Gap

A mismatch between customers' expectations based on a company's promotional messages and the actual service or product delivered.

Standards Gap

The discrepancy that occurs when the perceived quality or performance of a product or service falls short of the expected or promised standards.

Knowledge Gap

The divergence in information that occurs when one party possesses more or superior information compared to another, often leading to unequal opportunities and outcomes.