To Maximize Profit,the Firm Must Equate the

question 114

Multiple Choice

To maximize profit,the firm must equate the

• A)wage rate to the price of the good.
• B)wage rate to the marginal product of labour.
• C)value of marginal product to the factor price.
• D)marginal factor cost to the price of the output.
• E)marginal cost of the factor to the marginal product of the factor.

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Definitions:

Incremental Costs

The additional costs that are incurred if the level of business activity or output changes.

Out-of-Pocket Costs

Out-of-pocket costs are expenses that individuals directly pay from their funds, not covered by third-party payers like insurance.

Incremental Revenue

Additional revenue generated from a specific action or decision, beyond what would have been generated otherwise.

Special Order

A one-time order that is not considered part of the company's normal ongoing operations.