The marginal productivity principle says that a profit-maximizing firm should
a. hire capital until its marginal product is zero.
b. hire labor until another worker costs more to hire than he can earn for the firm.
c. hire the quantities of capital and of labor at which their marginal products are equal.
d. hire capital until its marginal product is negative.
B
Economics
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Suppose Katy Lucus maximized her total utility by buying different quantities of a variety of goods. Now suppose the price of one good rises. She then buys less of that good because the
a. MU/P of that good falls below the MU/P of other goods b. MU/P of that good rises above the MU/P of other goods c. marginal utility of that good diminishes d. total utility of that good diminishes e. marginal utility of that good rises
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