If a Firm's Marginal Revenue Product of Labor Is $100

question 35

Multiple Choice

If a firm's marginal revenue product of labor is $100 and it pays a wage rate of $85,

• A)the firm should reduce the wage it pays.
• B)the firm is maximizing its profits.
• C)the law of diminishing marginal productivity is being observed.
• D)the firm can raise its profits by increasing the number of workers.

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