Use the Following Graph,which Depicts Mighty Max's Labor Demand for His

question 4

Multiple Choice

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.

-If the wage of the fifth worker is $20 and his or her value of the marginal product of labor is $25,the firm

• A) benefits by stopping at this level of labor.
• B) is likely to fire the fifth worker.
• C) asks this fifth worker to work overtime.
• D) is likely to benefit by hiring more workers.
• E) is likely to lose profit by hiring more workers.

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