The Graph Below Illustrates the Average and Marginal Product of Labour

question 78

Multiple Choice

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises.

-Refer to the graph above to answer this question.How many units of labour does the firm need to employ to achieve an output that minimizes marginal cost?

• A)1.
• B)3.
• C)6.
• D)9.
• E)12.

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Definitions:

Market Price

The present cost at which one can buy or sell an item or service in a competitive market environment.

Perfectly Elastic

A situation where the demand or supply responds infinitely to changes in price, resulting in a horizontal demand or supply curve.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes; the demand or supply curve is perfectly vertical.

Relatively Elastic

Describes a situation where a small change in price leads to a significant change in quantity demanded or supplied.