If at a firm's current level of employment the marginal revenue product of the last worker employed is less than the marginal cost of labor,the firm should

A) provide more on-the-job training.
B) maintain the existing level of employment.
C) decrease employment.
D) increase employment.

Question

Tsion Gedlu · Accepted Answer

Final Answer : C, Explanation :  If the marginal revenue product is less than the marginal cost of labor, it means the firm is incurring a loss by employing the last worker. Therefore, it makes sense to decrease employment to reduce costs and minimize losses. Providing more on-the-job training or maintaining existing employment levels will not address the issue of a negative marginal cost situation. Increasing employment will only exacerbate the loss.

If at a firm's current level of employment the marginal revenue product of the last worker employed is less than the marginal cost of labor,the firm should

A) provide more on-the-job training.
B) maintain the existing level of employment.
C) decrease employment.
D) increase employment.

Definitions

Learning Objectives

Learning Objectives

Related questions

If at a firm's current level of employment the marginal revenue product of the last worker employed is less than the marginal cost of labor,the firm shouldA) provide more on-the-job training.B) maintain the existing level of employment.C) decrease employment.D) increase employment.

Definitions

Learning Objectives

Learning Objectives

Related questions

If at a firm's current level of employment the marginal revenue product of the last worker employed is less than the marginal cost of labor,the firm should

A) provide more on-the-job training.
B) maintain the existing level of employment.
C) decrease employment.
D) increase employment.