-If This Firm Were a Perfect Competitor Selling Its Entire

question 121

Multiple Choice

$$\begin{array}{l}\begin{array} { cc } \text { Units of Input}&\text { Units of Outputs }\\1 & 3 \\2 & 7 \\3 & 10 \\4 & 12 \\5 & 13 \\6 & 12\end{array}\end{array}$$
-If this firm were a perfect competitor selling its entire output at a price of $1,the marginal revenue product of the third unit of input would be

• A)$0.
• B)$1.
• C)$2.
• D)$3.
• E)$10.

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Definitions:

Normal Capacity

The average operating capacity a company can sustain under normal circumstances, taking into account seasonal and cyclical demand fluctuations.

Direct Labor Hour

The amount of time spent by employees directly working on producing goods or services.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used to manage labor costs more effectively.

Standard Rate

A predetermined cost or charge used as a benchmark in budgeting and pricing decisions.