A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm
A. should hire more labor because this will increase profits.
B. is currently hiring the profit-maximizing amount of labor.
C. should hire more labor, although this may either increase or decrease profits.
D. is selling its product in an imperfectly competitive market.
Answer: A
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Complete crowding out occurs when an increase in government spending is completely offset by an equal increase in tax revenues
Indicate whether the statement is true or false
(Last Word) In 2004, Congress passed a corporate tax relief bill with 276 provisions for tax breaks to groups such as restaurant owners, Hollywood producers, and NASCAR track owners. This is an example of the:
A. special-interest effect. B. benefits-received principle. C. paradox of voting. D. principal-agent problem.