If a Firm Finds That the Wage Rate (W) Is

question 364

Multiple Choice

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP) , then to maximize its profit the firm should hire

• A) less labor, which will increase the VMP.
• B) more labor, which will decrease the VMP.
• C) no more or less labor, because profits are greatest when W < VMP.
• D) more labor, because hiring more labor will increase both W and VMP until they are equal.

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Definitions:

Running Shoe

A type of footwear specifically designed to improve comfort and performance during running.

Institutional Market

A market segment consisting of large organizations such as hospitals, schools, and government agencies that procure goods or services in substantial quantities.

Original Equipment Manufacturer

Companies that produce parts or equipment that may be marketed by another manufacturer.

Hospital

A healthcare institution providing patient treatment with specialized medical and nursing staff and medical equipment.