Consider the Short Run Production Function for a Hypothetical Restaurant

question 10

Multiple Choice

Consider the short run production function for a hypothetical restaurant shown in the table.Cooks are equally talented and hardworking.The MPL column in the table illustrates

• A) that firms tend to hire the best workers first.
• B) the law of supply.
• C) diminishing marginal returns in labor that derives from the fact that as employment expands cooks have less capital per person to work with.
• D) increasing returns to scale followed by decreasing returns to scale, which is a fundamental empirical proposition in economics.

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Definitions:

Profit-Maximizing Price

The price level at which a firm can generate the maximum possible profit, considering the relationship between price, demand, and cost.

High School Yearbook

A publication compiled annually by students or staff, capturing memories, photographs, and articles related to the events and people of a specific school year.

Collusively

Involves cooperation among competing firms to control market prices or exclude new competitors, contrary to free market principles.

Economic Profits

The surplus remaining after subtracting total costs from total revenues, including both explicit and implicit costs.