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Suppose a Competitive Firm Is Paying a Wage of $12

Question 168

Multiple Choice

Suppose a competitive firm is paying a wage of $12 an hour.Assume that labor is the only input.If hiring another worker would increase output by four units per hour, then to maximize profits the firm should


A) not change the number of workers it currently hires.
B) hire the extra worker.
C) layoff some workers.
D) There is not enough information to answer the question.

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