Suppose a Firm Is Operating in a Competitive Product Market

question 167

Multiple Choice

Suppose a firm is operating in a competitive product market with competitive factor markets.Further, assume labour is the firm's only factor of production.Which of the following conditions will ensure the firm is maximising profit? (Let P be the price of the good, MPL the marginal product of labour, W the wage rate, and MR the marginal revenue of the good.)

• A)P = W
• B)P x MPL = W
• C)MPL = W
• D)MR = P x MPL

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Definitions:

Fibrous Connective Tissue

A type of connective tissue that is composed mainly of fibers, providing support and strength to various body structures.

Reflex Arc

The neural pathway that controls a reflex action, involving a sensory nerve and a motor nerve with a synapse.

Efferent Neuron

A type of neuron that carries signals away from the central nervous system towards the periphery to initiate action or movement.

Central Canal

The longitudinally extending space filled with cerebrospinal fluid that spans the full length of the spinal cord.