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Explain How a Firm Values the Contribution of Workers to Its

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Essay

Explain how a firm values the contribution of workers to its profitability.Would a profit-maximising competitive firm ever stop increasing employment as long as marginal product is rising? Explain your answer.


Definitions:

Dummy Variables

Variables used in regression analysis to represent categorical data by assigning numerical values, typically 0 or 1, to represent the presence or absence of certain characteristics.

Categorical Variable

A variable that represents groups or categories, which are not numerical.

Regression Equation

An equation that describes the average relationship between a dependent variable and one or more independent variables.

Coefficient Of Determination

A metric quantifying the amount of variation in a dependent variable accounted for by one or more independent variables within a regression model.

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