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Ernie's Sushi-On-A-Stick Is a Perfectly Competitive Firm Currently Employing 75

Question 74

Multiple Choice

Ernie's Sushi-On-A-Stick is a perfectly competitive firm currently employing 75 workers. The marginal revenue product of the 75th worker is $9.00 per hour. The wage rate is $12.00 per hour. To increase profits, this firm should


A) decrease employment until the MRP of labor equals $12.00.
B) increase employment until the MRP of labor equals $12.00.
C) continue hiring 75 workers because the firm earns a surplus of $3.00 on each worker hired.
D) increase the price of sushi-on-a-stick so that the marginal revenue product increases to $12.00 per hour.

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