For Maximum Profit, a Firm Hires Labor Up to the Point

question 309

Multiple Choice

For maximum profit, a firm hires labor up to the point at which the wage equals (i)
The value of the marginal product of labor.
(ii)
The marginal cost of an additional unit of output.
(iii)
Output price multiplied by the marginal product of labor.

• A)(i) and (ii) only
• B)(i) and (iii) only
• C)(ii) and (iii) only
• D)(i), (ii), and (iii)

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Definitions:

Business Receipts

The total revenue received by a business from goods sold or services provided during a specific period.

Bondholders

Individuals or entities that own bonds, which are debt securities issued by corporations or governments, entitling them to receive a fixed amount of interest and repayment of principal.

Incorporating

The process of legally declaring a business as a corporation, enabling the owners to separate their personal assets from the business assets.

Liability

A financial obligation or debt that an individual or company owes, which must eventually be settled or paid off.