Let MP = Marginal Product, P = Output Price, and W

question 14

Multiple Choice

Let MP = marginal product, P = output price, and W = wage, then the equation that represents a situation where a competitive firm should lay off some workers to maximize profits is

• A)P × MP = W.
• B)P × MP > W.
• C)P × MP < W.
• D)MP × W = P.

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Definitions:

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