A Firm Is Both Hiring Labor and Selling Output in Purely

question 39

Multiple Choice

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits. It is currently operating in the elastic range of its MRP curve. If the wage rate increases, its total spending on wages at the new equilibrium will

• A) be larger.
• B) be smaller.
• C) be unchanged.
• D) change in an undetermined direction.

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