Suppose That in January a Profit-Maximizing Firm Has 25 Employees

question 32

Multiple Choice

Suppose that in January a profit-maximizing firm has 25 employees.By February,the firm has decreased employment.One can infer that,when 25 employees are hired,the

• A) firm is losing market share.
• B) firm is minimizing losses.
• C) wage exceeds the value of the marginal product of labor.
• D) value of the marginal product of labor exceeds the wage.

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Definitions:

Cash Budget

A financial plan that estimates the cash inflows and outflows for a business over a specific period of time.

Depreciation Expense

An accounting method to allocate the cost of a tangible asset over its useful life, reflecting the asset's wear and tear or obsolescence.

Beginning Cash Balance

The amount of cash a company has at the start of a new financial period, carried over from the end of the previous period.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level, allowing better control and comparison between actual and budgeted performance.