Asked by
Radhika Rathi
on Dec 04, 2024
Verified
Use the following statements to answer this question: I. Under profit maximization, the quantity of labor used in production is optimal if MR = w/MPL.
II) The expression MR = w/MPL implies that the revenue earned from the last unit of output produced equals the marginal cost of the last unit of output.
A) I and II are true.
B) I is true and II is false.
C) II is true and I is false.
D) I and II are false.
Profit Maximization
The process a firm uses to determine the price and output level that returns the highest profit.
Marginal Cost
The rise in overall expense due to the production of an extra unit of a good or service.
Output Produced
The total amount of goods or services created or produced by an economic unit, such as a company or country, within a specific period.
- Identify the level of labor that maximizes profit in a perfectly competitive market environment.
Verified Answer
SM
Learning Objectives
- Identify the level of labor that maximizes profit in a perfectly competitive market environment.