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Suppose a Competitive Firm Is Paying a Wage of $12

Question 196

Multiple Choice

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


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

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