A Profit-Maximizing Firm Following the Marginal Decision Rule Will

question 62

Multiple Choice

A profit-maximizing firm following the marginal decision rule will:

• A) hire more labor if MRP < MFC.
• B) hire less labor if MRP > MFC.
• C) hire labor up to the point where MRP = MFC.
• D) hire more labor if MRP = 0.

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Definitions:

Bills Of Material

Detailed lists of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.

MPS

Master Production Schedule, a plan for the production of individual final items that breaks down the aggregate plan.

Aggregate Plan

A planning strategy that outlines the overall production activities of a company over a certain period of time to meet forecasted demand.