Suppose a Competitive Firm Is Paying a Wage of $12

question 142

Multiple Choice

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour, then to maximize profits the firm should

• A)not change the number of workers it currently hires.
• B)not hire an additional worker.
• C)hire another worker.
• D)There is not enough information to answer the question.

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Definitions:

Permanent

Refers to accounts or records in accounting that are not closed at the end of the accounting period and are carried over into the next period.

Temporary

Pertains to something not permanent or lasting only for a limited period of time.

General Journal

A primary accounting record used to record all types of transactions not assigned to any specialized journal.

Permanent

In the context of accounting, refers to accounts that are not closed at the end of the accounting period, such as asset, liability, and equity accounts.