Ernie's Sushi-On-A-Stick is a perfectly competitive firm currently employing 75 workers. The marginal revenue product of the 75th worker is $9.00 per hour. The wage rate is $12.00 per hour. To increase profits, this firm should
A. increase employment until the MRP of labor equals $12.00.
B. decrease employment until the MRP of labor equals $12.00.
C. increase the price of sushi-on-a-stick so that the marginal revenue product increases to $12.00 per hour.
D. continue hiring 75 workers because the firm earns a surplus of $3.00 on each worker hired.
Answer: B
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