Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A) hire another worker.
B) not change the number of workers it currently hires.
C) lay off some workers.
D) There is not enough information to answer the question.
B
You might also like to view...
Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?
A) The equilibrium price and quantity rise. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity fall. D) The equilibrium price falls, and the equilibrium quantity rises.
Refer to Table 14-1. Is there a dominant strategy for Godrickporter and if so, what is it?
A) Yes, Godrickporter should increase its advertising budget. B) Yes, Godrickporter should not change its advertising budget. C) Yes, Godrickporter's dominant strategy is to collude with Star Connections. D) No, its outcome depends on what Star Connections does.