Suppose a Competitive Firm Is Paying a Wage of $12

question 192

Multiple Choice

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If the last worker hired produces four units of output per hour, then to maximize profits the firm should

• A)not change the number of workers it currently hires.
• B)lay off some workers.
• C)hire another worker.
• D)There is not enough information to answer the question.

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