In the Percent-Of-Sales Method If (A/S₁) and L/S₁) Both Increase

question 20

Multiple Choice

In the percent-of-sales method if (A/S₁) and L/S₁) both increase

• A) RNF stays the same.
• B) RNF goes down.
• C) RNF goes up.
• D) more information is needed.

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Definitions:

MRP

Marginal Revenue Product, an economic theory stating the additional revenue generated from employing one more unit of a factor of production, like labor.

Wage Rate

The amount of money paid per unit of time or per task for labor or services.

Demand for Labor

The employers' total demand for workers, influenced by wages, productivity, and economic conditions.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.