All Perfectly Competitive Fast-Food Firms Are Hiring the Profit-Maximizing Quantity

question 180

Multiple Choice

All perfectly competitive fast-food firms are hiring the profit-maximizing quantity of labour and are paying their workers $7 per hour.If the government raises the minimum wage to $8 per hour:

• A) the value of the marginal product will exceed the wage,and firms will hire more workers.
• B) the value of the marginal product will be less than the wage,and firms will lay off some workers.
• C) firms will increase their prices to keep the value of the marginal product equal to the wage.
• D) firms will have to exit the industry since the value of the marginal product is always less than the wage.

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Definitions:

Multiples

Numbers that are the product of a given number and any other whole number.

Number 4

A numerical digit representing a quantity equivalent to the sum of 2 + 2.

Chewable Tylenol

A form of Tylenol (acetaminophen) medication designed to be chewed before swallowing, making it easier to ingest.

Symbol

A mark or character used as a conventional representation of an object, function, or process.