If the Wage Rate Is Less Than the Marginal Revenue

question 116

Multiple Choice

If the wage rate is less than the marginal revenue product of labor, the firm should ________ to maximize profits.

• A) hire less labor and produce less output
• B) hire less labor and produce more output
• C) hire more labor and produce less output
• D) hire more labor and produce more output

---

Definitions:

Appraised Fair Value

Appraised fair value is the estimation of an asset's worth at a particular time, based on expert analysis and market conditions.

Cost

The amount of money or resources expended to acquire an asset or to produce a product or service.

Depreciated

Depreciation refers to the reduction in the value of an asset over time due to wear and tear or obsolescence.