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One Seamstress Can Sew 2 Dresses Per Day and Two

Question 82

Multiple Choice

One seamstress can sew 2 dresses per day and two seamstresses can sew 5 dresses per day.If the marginal revenue product of hiring the second seamstress is $360,then in a competitive product market


A) there are decreasing returns to scale
B) there are diminishing returns to labor
C) each dress sells for $120
D) the seamstresses are earning zero economic profits in the short run
E) marginal cost of production is $120

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