A Soybean Farmer Sells Soybeans in a Perfectly Competitive Market

question 126

Multiple Choice

A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of soybeans is $1 a bushel,the wage rate is $12,the farmer employs six workers,and the marginal product of the sixth worker is 10.What would you advise this farmer to do?

• A) Do nothing because the wage rate and the marginal product of the last worker hired are equal.
• B) Reduce employment because the wage paid is greater than the marginal revenue product.
• C) Increase employment because the wage paid is less than the marginal revenue product.
• D) Increase the product price so that the wage and marginal revenue product will be equal.

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Definitions:

Standard Deviations

a measure of the amount of variation or dispersion of a set of values, indicating how much the values differ from the average of the set.

MTBF Distribution

Mean Time Between Failures (MTBF) Distribution refers to the probability distribution that represents the time between failures in a system or component, helping in reliability analysis.

Breakdown Maintenance

A reactive maintenance strategy that involves repairing or restoring equipment only after it has failed.

Preventive Maintenance

Regular and routine maintenance to help keep equipment running smoothly and prevent any unplanned downtime due to unexpected equipment failure.