Multiple Choice
Refer to the following:
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.
-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.
Correct Answer:

Verified
Correct Answer:
Verified
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