Suppose a firm is a price searcher in the product market and hires labor in a perfectly competitive labor market.The firm hires four workers, the marginal product of the fourth worker is 4, and the wage rate is $40.The firm produces 100 units of the product, which sell for a price of $10 each.This firm is
A) maximizing profit when it hires four workers
B) not maximizing profit and should hire more workers to increase profit
C) not maximizing profit and should hire fewer workers to increase profit
D) maximizing profit when it produces 100 units of the product
E) not maximizing profit when it produces 100 units of the product and should increase production to increase profit
Correct Answer:
Verified
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