A Firm Operating in a Purely Competitive Labor Market Has

question 137

Multiple Choice

A firm operating in a purely competitive labor market has the following marginal revenue product schedule. If the wage rate decreases from $17 to $13,by how much will the firm expand employment? Refer To: 10-69

• A) 5 workers
• B) 4 workers
• C) 3 workers
• D) 2 workers At the wage rate of $17 the firm hires 4 workers.At the lower wage rate of $13 the firm hires 6 workers.In both cases the wage rate is below (or equal to)the MRP.

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