If the Marginal Revenue Product (MRP) of Labor Is Less

question 88

Multiple Choice

If the marginal revenue product (MRP) of labor is less than the wage rate,

• A) the firm is making profits.
• B) the firm is incurring losses.
• C) more labor should be employed.
• D) less labor should be employed.

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Definitions:

Constant Rate

A stable speed or frequency at which something happens or changes over a particular period of time.

Constant-Rate

Pertaining to a process or quantity that changes over time at an unvarying speed or amount.

Progressive Tax

A tax system where the tax rate increases as the taxable amount increases, placing a heavier burden on wealthier taxpayers.

Proportional Tax

A taxation system where the tax rate remains constant regardless of the amount subject to tax.