Suppose a Firm Is Using Labor and Capital and Obtaining

question 13

Multiple Choice

Suppose a firm is using labor and capital and obtaining the maximum possible output for a given total cost.If the price of labor increases, all other things unchanged, then the firm will:

• A) shift funds out of labor into capital.
• B) adjust factor utilization until the ratios of marginal product to price are equal for the two factors.
• C) hire less labor, which will result in an increase in labor's marginal product, and hire more capital, leading to a fall in the marginal product of capital.
• D) do all of the above.

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Definitions:

Sales Team Meeting

A gathering of a company's sales department to discuss strategies, review performance, and set goals.

Preferred Channel

The most desired or effective method of communication for reaching an audience, such as email, social media, in person, etc.

External Communication

The process of exchanging information between an organization and external entities such as customers or partners.

Business Letters

Formal communications sent by a company to customers, vendors, partners, or employees, conveying professional information, requests, or instructions.