Chapter13: Factor Markets: With Emphasis On The Labor Market
Section13.1: Factor Market
Problem 1ST
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A small speciality cookie company, whose only variable input is labor, finds that the average worker can produce 25 cookies per day, the cost of the average worker is $128 per day, an the price of a cookie $0.50. Is the firm maximizing profit?
Choose the answer. It is not maximizing profit because...
a. the price of the output is not equal to the wage
b. the marginal product of labor is less than the wage
c. the marginal revenue product of labor is greater than the wage
d. the marginal revenue product of labor is less than the wage
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