Asked by Hassan ibrahim on Apr 24, 2024
Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $14 and her MRP is $10. On the basis of this information, we can say that
A) profits will be increased by hiring additional workers.
B) profits will be increased by hiring fewer workers.
C) marginal revenue product must exceed average revenue product.
D) the restaurant is maximizing profits.
MRC
Marginal Resource Cost, the cost of utilizing one additional unit of a resource or factor of production.
MRP
Marginal Revenue Product; the additional revenue generated from employing one more unit of a resource, commonly applied in economics.
- Understand the process of decision-making concerning the allocation of resources based on their marginal costs and revenue products.
Learning Objectives
- Understand the process of decision-making concerning the allocation of resources based on their marginal costs and revenue products.
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