Let MP = Marginal Product, P = Output Price, and W

question 14

Multiple Choice

Let MP = marginal product, P = output price, and W = wage, then the equation that represents a situation where a competitive firm should lay off some workers to maximize profits is

• A)P × MP = W.
• B)P × MP > W.
• C)P × MP < W.
• D)MP × W = P.

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Definitions:

Safety Stock

Inventory kept on hand to protect against stockouts caused by variations in supply and demand.

Lead Time

The total time that elapses from the initiation of a process or order until its completion, often used in manufacturing and project management to measure efficiency.

Ohno's Seven Wastes

A foundational concept in lean manufacturing, identifying seven types of waste to eliminate: overproduction, waiting, transport, over-processing, inventory, motion, and defects.

Distance Reductions

A strategy aimed at minimizing the distance traveled during manufacturing or supply chain operations to enhance efficiency and reduce costs.