Suppose There Is a Perfectly Competitive Firm That Has Hired

question 9

Multiple Choice

Suppose there is a perfectly competitive firm that has hired 200 workers.Suppose wages equal $15 per hour and the marginal revenue product of labor is $20.What should the firm do in order to reach the profit-maximizing level of production?

• A) Hire more workers till MRP = MC.
• B) Keep the same number of workers.
• C) Fire workers until MRP = MC.
• D) Lay off the less efficient workers.
• E) C and D

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Definitions:

Lease Expiry

The end of a lease agreement term, after which the lessee must vacate the property or negotiate a renewal of the lease.

Residential Tenancy

A legal agreement between a landlord and tenant for the rental of a living space, such as a house or apartment.

Absolute Right

A legal right that is complete and not contingent upon external conditions or restrictions.

Sublet

The act of leasing out a rented property by the original tenant to a third party.