Suppose the Market Wage Facing a Firm in the Perfectly

question 94

Multiple Choice

Suppose the market wage facing a firm in the perfectly competitive candle-making industry is $20 per hour,and the firm sells its candles for $2 each.Given this information,the firm should hire workers until the marginal product of labor equals ________.

• A) 10 candles per hour
• B) 18 candles per hour
• C) 20 candles per hour
• D) 22 candles per hour

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Definitions:

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects receivables or the speed of their customer payments.

Average Receivables

A measure that summarises the average amount of accounts receivable over a specific period, often used to assess the effectiveness of a company's credit and collection policies.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, often including balance sheet, income statement, and cash flow statement.