Company B has just discovered that the marginal revenue product generated by the last worker hired was $25 while the marginal factor cost was $25. What should Company B do?
A) Leave the level of production unchanged.
B) Increase the amount produced.
C) Reduce the amount produced.
D) Collect more information before making a decision.
Answer: A
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Productivity is defined as: a. the ratio of a specific measure of output to a specific measure of input
b. the production of worthwhile goods and services. c. the market value of goods, services, and resources produced per time period (e.g., per year). d. average input divided by average output. e. total input divided by average output.
Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter. Use supply and demand analysis, including graphical and verbal explanation, for these winter “sales.”
What will be an ideal response?