If a Firm Wants to Maximize Profits It Should

question 81

Multiple Choice

If a firm wants to maximize profits it should

• A) hire each factor of production up to the point at which the marginal physical product per last dollar spent is equalized.
• B) hire each factor of production up to the point at which the marginal revenue product per last dollar spent is equalized.
• C) hire each factor of production up to the point at which the marginal factor cost per last dollar spent is equalized.
• D) hire the same number of units of all inputs.

---

Definitions:

Criminally Liable

The legal responsibility one holds for committing a crime, subjecting them to criminal prosecution and penalties.

Vicarious Liability

A legal principle where an individual or entity is held responsible for the actions or omissions of another person, typically in employment situations.

Scope of Employment

Refers to the range of activities and duties that an employee is expected to perform as part of their job.

Undisclosed Principal

A party in a contract whose identity is unknown to the third party at the time the contract is made.