Table 17-3 Hotspur Incorporated, a Manufacturer of Microwave Ovens, Is a Price

question 135

Multiple Choice

Table 17-3

Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets. The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80. Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces. Assume that labor is the only variable input.
-Refer to Table 17-3.What is Hotspur's profit-maximizing quantity of labor?

• A)2 workers
• B)3 workers
• C)5 workers
• D)6 workers

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Definitions:

Binding Ruling

A final and enforceable decision given by a legal authority, which all involved parties must adhere to.

Contract

A legally enforceable pact made between two or more entities, binding them in agreement.

Punitive Damages

Compensation awarded in a lawsuit that exceeds simple restitution and is intended to punish the defendant for wrongdoing and deter future similar acts.

Arbitrator's Award

The decision or outcome given by an arbitrator, who is a neutral third party, at the conclusion of an arbitration proceeding.