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:

Real GDP

The total value of all goods and services produced by a country adjusted for inflation, reflecting the real quantity of goods and services produced.

Percentage Change

A mathematical calculation that describes the degree of change over time, often used to compare the difference between two numbers expressed as a fraction of the initial value.

GDP Deflator

A price index that measures the change in the price level of all new, domestically produced, final goods and services in an economy.

Real GDP

Gross Domestic Product adjusted for inflation, which represents the value of all goods and services produced over a specific time period within a country.