When a Firm Is Hiring an Input Such That the Marginal

question 146

Multiple Choice

When a firm is hiring an input such that the marginal revenue product of the input is equal to the marginal factor cost of the input, the firm

• A) should be expanding output.
• B) is hiring too little of the input.
• C) is maximizing economic profit.
• D) is producing too much output.

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Definitions:

Total Asset Turnover

A financial measure that calculates the ability of a company to turn its assets into sales revenue.

Return On Total Assets

A financial ratio that measures a company's ability to generate profit from its assets.

Return On Total Assets

A measure of a company's profitability relative to its total assets, indicating how effectively it uses its assets to generate earnings.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the shareholders' perspective.