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Pat Works for a Landscape Contractor,generating Gross Revenues of $50

Question 6

Multiple Choice

Pat works for a landscape contractor,generating gross revenues of $50 per hour.Non-labor variable costs total $10 per hour.Pat loves to garden,and would be willing to work for $15 per hour.Assume that the labor market is perfectly competitive.
The difference between the net revenue generated by Pat and Pat's reservation price will eventually


A) be captured by Pat in the form of rent.
B) be captured by Pat's employer in the form of profit.
C) cause wages in the landscape market to fall to $15.
D) be split evenly between Pat and the landscape company.

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