A Profit-Maximizing Firm Would Hire More Employees If

question 18

Multiple Choice

A profit-maximizing firm would hire more employees if

• A)marginal product of labour exceeds real wage.
• B)marginal product of labour is less than real wage.
• C)marginal revenue product of labour is less than real wage.
• D)marginal revenue product of labour is less than nominal wage.

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Definitions:

Capacity

The highest level of production a company can maintain to produce a good or deliver a service.

Collateral

An asset pledged as security for repayment of a loan, to be forfeited in case of default.

Probability of Payment

The likelihood or chance that a borrower will meet their debt obligations on time.

Cash Discount Period

The time frame within which a purchaser can pay less than the full invoice amount due to taking advantage of a cash discount offered by the seller.