In General,a Firm Should Employ Additional Units of Labor as Long

question 22

Multiple Choice

In general,a firm should employ additional units of labor as long as

• A) they are willing to work.
• B) their wages exceed the value of their marginal product.
• C) their wage rates do not change.
• D) they add at least as much to revenues as they do to costs.
• E) production is functioning.

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Definitions:

Minimum Average Variable Cost

The lowest point at which a company can produce its product with the least average variable costs involved.

Marginal Revenue

The incremental income a business obtains by selling one more unit of a product or service.

Average Total Cost

The total cost of producing a certain quantity of output divided by that quantity, representing the per-unit cost of production.

Economic Losses

Financial losses incurred due to factors such as market fluctuations, business operation inefficiencies, or external events affecting the economy.