Initially,when a Firm Hires a Fourth Worker,its Wage Rate Goes

question 8

Multiple Choice

Initially,when a firm hires a fourth worker,its wage rate goes from $80 a worker to $90.The marginal revenue product of the fourth worker is $100.Then the government imposes a minimum wage of $90 a worker.If the firm now hires the fourth worker,its profits

• A) will increase by $10.
• B) will increase by $20.
• C) will decrease by $10.
• D) will decrease by $20.

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