Businesses Fail Because

question 28

Multiple Choice

Businesses fail because:

• A) they follow the principle of consumer sovereignty too closely.
• B) the invisible hand determines that they are not producing something that is socially valuable.
• C) they earn excessive profits.
• D) entrepreneurship is present.

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Definitions:

Marginal Revenue Product

The additional revenue produced from using one more unit of an input.

Marginal Labor Cost

The additional cost incurred by hiring one more unit of labor.

Hourly Wage

The amount of money that an employee is paid for each hour of work.

Production Workers

Production workers are employees involved in the manufacturing process or operations of producing goods and services.