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When Maxwell Fruit Drinks Increases the Number of Workers It

Question 69

Multiple Choice

When Maxwell Fruit Drinks increases the number of workers it employs from 20 to 25, its total labor costs rise from $10,000 to $15,000 a week. We know then that


A) Maxwell should never have hired the last five workers
B) Maxwell should continue hiring workers
C) diminishing returns have set in
D) the marginal revenue product curve is decreasing
E) the marginal labor cost is $1,000

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