A Profit-Maximizing Firm Will Continue to Hire Labour Until the

question 89

Multiple Choice

A profit-maximizing firm will continue to hire labour until the

• A)wage rate equals the last worker's marginal product.
• B)last worker's value of marginal product is maximized.
• C)last worker's value of marginal product is negative.
• D)wage rate equals the last worker's value of marginal product.
• E)last worker's value of marginal product equals zero.

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Definitions:

Variable Cost Per Unit

The expense associated with producing one additional unit of product, which changes with the level of output.

Annual Fixed Costs

Costs that do not vary with the level of production or sales volume within a certain range and time period, such as rent, salaries, and insurance.

Turnover

A financial metric indicating the rate at which a company's inventory or assets are replaced through sales in a given period.

Minimum Required Rate

This is the lowest rate of return or interest rate that investors are willing to accept for investment in a project, often influenced by risk and market conditions.