A Profit Maximizing Firm That Is a Price Taker in Both

question 32

Multiple Choice

A profit maximizing firm that is a price taker in both product and factor markets will hire a factor up to the point at which

• A)the last unit of the factor hired adds as much to costs as it does to revenues.
• B)the value of marginal product equals the wage rate.
• C)the marginal revenue product equals the wage rate.
• D)all of the above
• E)a and b