(Table: Value of the Marginal Product of Labor and Demand)

question 107

Multiple Choice

(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.If the price of a power cord is $2 and the market wage rate is $60 per hour, the profit-maximizing quantity of labor is __ workers.

• A)zero
• B)two
• C)four
• D)six

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Definitions:

Equipment

Physical assets used in the operation of a business, particularly in the production, maintenance, or logistics processes.

Profitability Index

A financial metric used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment.

Present Value

A calculation that determines the current value of a future amount of money or stream of cash flows given a specified rate of return.

Cash Inflows

Money received by a business from its operational activities, investments, or financing.