A Monopolist Is Currently Hiring 5,000 Units of Labor

question 74

Multiple Choice

A monopolist is currently hiring 5,000 units of labor.At this level,the marginal revenue of output is $10,the (fixed) wage rate is $300,and the marginal product of labor is 50.In order to maximize profit,the firm should

• A)keep the level of employment the same because the firm is earning a profit of $100,000.
• B)hire more labor because the next unit of labor increases profit by $500.
• C)hire more labor because the next unit of labor increases profit by $200.
• D)hire less labor because the last unit of labor added more to total cost ($300)than to total revenue ($10).

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Definitions:

Valid

Having legal force, binding, or enforceable; conforming to the law or to established legal forms and requirements.

Donee Beneficiaries

Individuals or entities intended by the parties in a contract to receive benefits from the agreement's performance without being directly involved in the contract.

Incidental Beneficiaries

Individuals or entities who indirectly benefit from a contract despite not being explicitly mentioned as parties to the contract.

Assignee

An individual or entity to whom rights or interests have been transferred by another party.