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A Firm Finds That It Must Increase Wages to Attract

Question 6

Multiple Choice

A firm finds that it must increase wages to attract extra workers. The firm will hire labor up to the point where the marginal


A) product of labor equals the wage rate.
B) revenue product of labor is greater than the wage rate.
C) revenue product of labor starts to decline.
D) revenue product equals the additional cost of hiring an extra worker.

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