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The Table Below Shows a Competitive Firm's Short-Run Production Function Units of Labor  Units of Output33704490557066007620\begin{array}{cccc} \text {Units of Labor } & \text { Units of Output} \\3 &370\\4 &490\\5 &570\\6 &600\\7&620\\\end{array}

Question 87

Multiple Choice

The table below shows a competitive firm's short-run production function.Labor is the firm's only variable input,and market price for the firm's product is $2 per unit. Units of Labor  Units of Output33704490557066007620\begin{array}{cccc} \text {Units of Labor } & \text { Units of Output} \\3 &370\\4 &490\\5 &570\\6 &600\\7&620\\\end{array}

If the wage rate is $200,the firm should


A) shut down because average revenue product is $200,which is less than marginal revenue product.
B) shut down because average revenue product is $228,which is greater than the wage rate.
C) produce because average revenue product is $200,which is less than marginal revenue product.
D) produce because average revenue product is $245,which is greater than the wage rate.

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