If a Firm Finds That the Wage Rate (W) Is

Multiple Choice

If a firm finds that the wage rate (W) is less than the value of marginal product (VMP) , then to maximize its profit the firm should hire

A) less labor, which will increase the VMP.
B) more labor, which will decrease the VMP.
C) no more or less labor, because profits are greatest when W < VMP.
D) more labor, because hiring more labor will increase both W and VMP until they are equal.