(Figure: Production Function I) Which of the Following Statements Is

question 98

Multiple Choice

(Figure: Production Function I) Which of the following statements is (are) TRUE? I. At L = 5, MPT_L > AP_L.
II) At L = 2, MP_L = AP_L.
III) For this production function, MP_L is greater at L = 2 than at L = 8.
IV) For this production function, MP_L is always greater than AP_L.

• A) I and II
• B) III
• C) I and IV
• D) II

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Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that excludes interest and income tax expenses.

Income Statement

A financial statement showing a company's income, expenses, and profits over a specified period, typically a quarter or year.

EBIT

Earnings Before Interest and Taxes is a measure of a firm's profitability that excludes interest and income tax expenses.

Operating Profit

Profit generated from a company's core business operations, excluding deductions of interest and taxes.