Consider a Firm That Seeks to Minimize the Cost of Producing

question 12

Multiple Choice

Consider a firm that seeks to minimize the cost of producing a given level of output. How will it respond to an increase in the wage rate?

• A) It will hire more workers
• B) It will increase production
• C) It will substitute capital for labour
• D) It will decide based on whether labour is an inferior factor of production or a normal one
• E) It will not react at all

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Definitions:

Organizational Theorists

are scholars and researchers who study the structures, processes, and behavior within organizations to understand their function and design effective management practices.

Organic

Pertains to living organisms or their derivatives; in a broader sense, refers to something that evolves naturally, without forced methods or artificial components.

Span Of Control

The number of direct reports or subordinates that a manager or supervisor is responsible for overseeing.

Employees

Individuals who are hired to perform tasks or services for an employer under an agreement of compensation, whether monetary or otherwise.