If Tie-Dyed T-Shirts is currently employing labor so that the wage is greater than the marginal revenue product of labor, it must also be true that
A) total revenues would be less than total costs.
B) the wage is less than marginal cost.
C) the price of the product must be less than marginal cost.
D) the price of the product must be greater than marginal cost.

Question

Quizplus · Accepted Answer

If the wage is greater than the marginal revenue product of labor, it implies that the cost of hiring an additional worker is more than the revenue generated by that worker. This situation suggests that the firm is not maximizing profit, and the price of the product must be less than the marginal cost, as the firm is not covering the additional cost of production.

If Tie-Dyed T-Shirts Is Currently Employing Labor So That the Wage