Over a five-year span, the ABC Co reduced the amount of labor it hired. At the same time, the marginal productivity of labor increased. Which of the following COULD explain this observation?
A) the law of diminishing marginal returns
B) labor saving technical change
C) organizational innovation
D) All of the above.
D
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Firms in perfectly competitive markets who wish to maximize profits should produce where:
A. marginal revenue and marginal cost are equal. B. marginal revenue and market price are equal. C. marginal revenue and average revenue are equal. D. marginal cost and average cost are equal.
An industry in which total costs are kept to a minimum because only one firm serves the whole market is called a:
a. natural monopoly. b. competitive monopoly. c. patent monopoly. d. limit monopoly.
Which of the following statements regarding a competitive firm is correct?
a. Because demand is downward sloping, if a firm increases its level of output, the firm will have to charge a lower price to sell the additional output. b. If a firm raises its price, the firm may be able to increase its total revenue even though it will sell fewer units. c. By lowering its price below the market price, the firm will benefit from selling more units at the lower price than it could have sold by charging the market price. d. For all firms, average revenue equals the price of the good.
Peak efficiency _________ achieved under monopolistic competition.
Fill in the blank(s) with the appropriate word(s).