Suppose the MRP of the 49th worker at a firm is $25 and that the market wage rate is $15. We know that if this firm operates in perfectly competitive product and labor markets
A) the firm is paying wages above the minimum wages.
B) the firm's profits would increase if it fired some workers.
C) the firm would be more profitable if it hired more workers.
D) the firm should use more capital.
Answer: C
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Regulation that specifies that a firm's profits must be shared with its customers if the profit rises above a target level is called
A) rate of return regulation. B) minimum price regulation. C) earnings sharing regulation. D) average cost pricing.
If all firms in a market have the same LRATC curve,
a. only one of them can survive in the long run b. the lowest possible long-run price is determined by LRATC at minimum efficient scale c. the highest possible long-run price is determined by LRATC at minimum efficient scale d. minimum efficient scale must be zero e. there is no minimum efficient scale