Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets. To maximize its profit, Hotspur will hire labor up to the point where
A) the marginal revenue product of labor equals the wage rate.
B) the marginal revenue product of labor equals the output price.
C) the marginal product of labor is no longer positive.
D) all economies of scale have been exhausted.
A
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________ risk involves variation in returns due to the ups and downs of the economy, the industry and the firm
A) Structural B) Fluctuational C) Business D) Financial
When contemplating the purchase of a resource, the pure monopsonist should do which of the following to maximize profit?
A) Purchase enough to make the marginal expenditure equal to the marginal revenue product. B) Purchase enough to make the average expenditure equal to the marginal revenue product. C) Pay a wage equal to the value of MRP at the intersection of MRP and ME curves. D) Pay a wage equal to the value of MRP at the intersection of AE and MRP curves.