We Observe a Profit-Maximizing Firm Hiring Its 75th Employee

question 473

Multiple Choice

We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer that, when 74 employees are hired, the

• A)wage exceeds the value of the marginal product of labor.
• B)value of the marginal product of labor exceeds the wage.
• C)marginal product of labor is increasing.
• D)firm is attempting to increase its market share.

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Definitions:

Beginning Inventory

The value of a company's inventory at the start of an accounting period.

Weighted Average Method

An inventory costing method that calculates cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Inventory Costs

Expenses associated with ordering, storing, and managing inventory, including cost of goods sold, storage, and insurance.

Finished Goods

Rephrased: Completed production items that are ready for sale but haven't yet been sold, reflecting a key category of inventory for manufacturers.