Which of the following is TRUE?
a. Maximizing division profits always leads to maximizing company-wide profits
b. Managers of profit centers are given a lot discretion in their decision making
c. Profit centers usually require the highest degree of attention of corporate executives
d. A manager being rewarded on division revenues has no incentive to make good decisions for his division
b
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For any resource it hires, a firm's marginal revenue product
a. is the change in the firm's total cost divided by the change in employment of that resource b. equals the resource's marginal factor cost c. equals marginal cost d. is the change in the firm's total revenue divided by the change in employment of that resource e. equals the change in the firm's marginal revenue
The MR = MC rule is no longer accepted by most economists as representing the behavior of firms
Indicate whether the statement is true or false