As More Labor Is Hired, the Marginal Revenue Product of a Competitive

question 2

Multiple Choice

As more labor is hired, the marginal revenue product of a competitive firm

• A)increases because total revenue increases.
• B)declines because marginal product of labor declines.
• C)does not change because marginal revenue is constant.
• D)declines because output price declines.
• E)declines because marginal revenue declines.

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Definitions:

Sole Proprietorship

A form of business in which an individual pursues business for a profit.

Small Business Ownership

The operation and responsibilities of running a small-scale business, usually characterized by limited revenue and personnel numbers.

Financing

is the process of sourcing capital or funds to finance the operations, projects, or investments of an individual, organization, or government.

Limited Liability Corporation

A hybrid business form combining the advantages of the sole proprietorship, partnership, and corporation.