The Bulldog Beanery Coffee Shop Is a Perfectly Competitive Firm

Multiple Choice

The Bulldog Beanery Coffee Shop is a perfectly competitive firm currently employing 30 workers. The marginal revenue product of the 30th worker is $7/hour. The wage rate is $8/hour. To increase profits, this firm should

A) decrease employment until the MRP of labor equals $8.00.
B) increase the price of coffee so that the marginal revenue product increases to $8.00 per hour.
C) increase employment until the MRP of labor equals $8.00.
D) continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired.