If the Value of Marginal Product of a Factor of Production

question 41

Multiple Choice

If the value of marginal product of a factor of production exceeds the price of the factor, the

• A) firm should hire more of that factor.
• B) firm should hire less of that factor.
• C) firm is maximizing profits.
• D) firm should shut down.

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Definitions:

Customer Service Department

A division within a company that handles inquiries, complaints, and support requests from customers.

Capacity Analysis

Calculating the production capacity an organization needs to fulfill the dynamic demands for its products.

Time-Driven

A method or approach that bases calculations, actions, or operations on the passage of time, often used in costing and scheduling.

Activity-Based Costing

A costing method that allocates overhead costs based on each product's activities or consumption rather than a standard rate.