You operate a shop that repairs TVs and VCRs. The going wage rate in a competitive market for skilled repair people is $18 per hour. Given the current demand for your services, the marginal revenue product of your repair people is $28 per hour. If you were to employ one more hour of a repair person's services you would
A. increase your profit by $28.
B. increase your profit by $18.
C. increase your profit by $10.
D. not increase your profit at all.
C. increase your profit by $10.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The law of diminishing returns explains why
a. monopolies have a guaranteed profit margin b. short-run MC and AVC curves are U-shaped c. the production possibilities curve is bowed out d. long run supply curves are downward sloping e. total product is a straight line
The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run
a. True b. False Indicate whether the statement is true or false
Two businesses coming together to form a single company is known as? a(n) __________.
A. hostile takeover B. acquisition C. leveraged buyout D. joint venture E. merger