Refer to the Following:
the Table Below Shows a Competitive $\begin{array}{ll} \text {Units of Labor }& \text {Units of Output }\\3 & 370 \\4 & 490 \\5 & 570 \\6 & 600 \\7 & 620\end{array}$

question 23

Multiple Choice

Refer to the following:
The table below shows a competitive firm's short-run production function. Labor is the firm's only variable input, and market price for the firm's product is $2 per unit.
$\begin{array}{ll} \text {Units of Labor }& \text {Units of Output }\\3 & 370 \\4 & 490 \\5 & 570 \\6 & 600 \\7 & 620\end{array}$
-If the wage rate is $200, the firm should

• A) shut down because average revenue product is $200, which is less than marginal revenue product.
• B) shut down because average revenue product is $228, which is greater than the wage rate.
• C) produce because average revenue product is $200, which is less than marginal revenue product.
• D) produce because average revenue product is $245, which is greater than the wage rate.

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Definitions:

Behavior

The actions or reactions of a person or system in response to external or internal stimuli.

Marketing Channel

Critical actions or procedures required to shift goods' ownership from the production point to the consumption point.

Profitability

The financial success indicated by the surplus of income over expenses, demonstrating a company's ability to generate earnings.

Margins Earned

The difference between the cost of producing or purchasing goods and the revenue generated from selling them, typically expressed as a percentage of revenue.