If a Firm Finds Itself at the Point Where the Value

question 128

Multiple Choice

If a firm finds itself at the point where the value of marginal product of labor is greater than its wage rate,then the firm

• A) stops hiring more workers but does not fire any because the firm is maximizing its profit.
• B) decreases the number of workers it has hired in order to increase its profit.
• C) increases the number of workers it hires in order to increase its profit.
• D) increases sales to keep its employees busy.
• E) changes its employment of workers and maximizes its profit by hiring the number of workers that makes the difference between the value of the marginal product and the wage rate as large as possible.

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