The Marginal Productivity Principle Says That a Profit-Maximizing Firm Should

question 87

Multiple Choice

The marginal productivity principle says that a profit-maximizing firm should

• A)hire capital until its marginal product is zero.
• B)hire labor until another worker costs more to hire than he or she can earn for the firm.
• C)hire the quantities of capital and of labor at which their marginal products are equal.
• D)hire capital until its marginal product is negative.

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