The First Firm in an Industry

question 103

Multiple Choice

The first firm in an industry

• A)will always make an economic profit.
• B)may make an economic profit.
• C)will make a loss but want to stay in business.
• D)will make a loss so large that it wants to shutdown.

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Definitions:

Marginal Product

Marginal Product refers to the additional output generated by employing one more unit of a particular input, holding all other inputs constant.

Bricklayers

Skilled tradespeople who lay bricks, concrete blocks, stone, and other masonry materials to construct or repair walls, foundations, partitions, and other structures.

Efficiency Wage

A theory suggesting that paying workers a higher wage than the market equilibrium wage can lead to increased productivity and efficiency.

Equilibrium Wage

The salary level where the demand for labor from employers matches the supply of labor from workers.