If the Marginal Revenue Product of the Last Worker Hired

question 156

Multiple Choice

If the marginal revenue product of the last worker hired exceeds the marginal factor cost of the worker, the firm would be better served if it

• A) hires additional workers.
• B) maintains its current level of workers already hired.
• C) lays off the last worker hired.
• D) None of the above is a good option for a profit-seeking firm.

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Definitions:

Value Of A Right

In finance, the value associated with a right, such as a stock right, which is the value to buy additional shares at a discounted price.

Market Price

The current valuation at which an asset or service is available for sale or purchase in the marketplace.

New Equity Issue

The process of issuing new shares of stock to raise capital for a company.

Liquidity

The ease with which an asset can be converted into cash without significantly affecting its market price.