A Profit- Maximizing Firm Will Increase Its Use of Capital

question 81

Multiple Choice

A profit- maximizing firm will increase its use of capital and decrease its use of labour when the

• A) average product of capital is higher than the average product of labour.
• B) total product of capital is higher than the total product of labour.
• C) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour.
• D) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
• E) marginal product of capital is higher than the marginal product of labour.

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Definitions:

Growers Mart

A marketplace or exchange platform dedicated to the sale and purchase of agricultural products directly from farmers.

Fresh Farm LLC

A company likely involved in agriculture, specifically in producing and possibly selling fresh farm products.

Identification

In a sale of goods, the express designation of the specific goods provided for in the contract.

Buyer

An individual or entity that acquires goods or services in exchange for money.