If the Value of the Marginal Product of Labor Is

question 384

Multiple Choice

If the value of the marginal product of labor is less than the wage, then the firm could

• A)increase profit by hiring additional labor.
• B)increase profit by reducing the amount of labor hired.
• C)increase revenue by lowering output.
• D)reduce total cost by hiring additional workers.

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Definitions:

Oligopolistic Industries

Market structures characterized by a small number of firms that dominate the industry, leading to competition primarily on factors other than price, such as innovation or advertising.

Product Price

The amount of money required to purchase a good or service, determined by factors such as production costs, demand, and supply.

Herfindahl Index

A gauge of company sizes within their market and a marker for the degree of rivalry between them.

Market Shares

The share of a market dominated by a specific company or product, commonly represented as a percentage of the overall sales within that market.