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If the Wage Rate Exceeds the Value of Marginal Product

Question 39

Multiple Choice

If the wage rate exceeds the value of marginal product, a firm


A) can increase its profit by firing some workers.
B) can increase its profit by increasing the wage rate and not changing its employment.
C) can increase its profit by hiring more workers.
D) can increase its profit by increasing the wage rate and increasing its employment.
E) is maximising its profit.

Correct Answer:

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