Author Question: Suppose the labor market is perfectly competitive, but the output market is not. When the labor ... (Read 91 times)

erika · **on:** Jul 1, 2018

Suppose the labor market is perfectly competitive, but the output market is not. When the labor market is in equilibrium, the wage rate will:

A) be less than price times the marginal product of labor.
B) equal price times the marginal product of labor.
C) be greater than price times the marginal product of labor.
D) None of the above is necessarily correct.

Question 2

Use the following statements to answer this question. I. To maximize profit, a firm will advertise more when the advertising elasticity is larger. II. To maximize profit, a firm will advertise more when the price elasticity of demand is smaller.

A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.