Table 5.2 -Refer to Table 5.2, Which Gives a Firm's Production Function

question 84

Multiple Choice

Table 5.2
-Refer to Table 5.2, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product is maximized when the firm hires

• A) 2 workers.
• B) 3 workers.
• C) 4 workers.
• D) 5 workers.

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Definitions:

Variable Expense

Expenses that vary directly with changes in production volume or business activity levels.

Contribution Margin Ratio

A ratio that measures the proportion of sales revenue that exceeds variable costs, indicating how effectively a company can cover its fixed costs.

Target Profit

The desired net profit a company aims to achieve for a specific period.

Monthly Fixed Expense

Costs that do not vary in total regardless of production volume or sales levels, paid on a monthly basis.