A Firm Operating in Competitive Input and Output Markets Purchases

question 1

Multiple Choice

A firm operating in competitive input and output markets purchases new technology, which shifts the total product schedule from A to B, as shown in the data in the table. At the market wage rate of $30 and product price of $5, this firm will

• A)hire the same number of laborers in both situations.
• B)increase the number of laborers hired from 4 to 6.
• C)decrease the number of laborers hired from 4 to 3.
• D)increase the number of laborers hired from 4 to 5.