The Optimal Number of Workers for a Perfectly Competitive Firm

question 87

Multiple Choice

The optimal number of workers for a perfectly competitive firm to hire occurs when

• A)total labor cost equals total revenue.
• B)diminishing marginal productivity is first experienced.
• C)the wage rate equals the marginal product of the last worker.
• D)the wage rate equals the value of marginal product of the last worker.

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Definitions:

Competitive Markets

Markets characterized by numerous buyers and sellers, making the market competitive and ensuring no single entity can dictate prices or terms.

Agricultural Subsidies

Financial aids and support provided by government agencies to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

Food, Conservation, And Energy Act

A piece of legislation aimed at governing various aspects of food, agriculture, and energy resource management; also known as the Farm Bill.

Smooth Income

The practice or process of stabilizing income over time in order to manage fluctuations and avoid significant variations in earning levels.