Economics 9708 · AS & A Level · Long-run costs and economies of scale

Long-run costs and economies of scale — practice question

A firm is operating in perfect competition in both the product market and the factor market, with labour as the only variable factor input. In the diagram, the line JK illustrates the link between the marginal physical product of labour and the number of hours worked. If the product price is $1.60, the firm employs 3000 hours of labour. What is the hourly wage?

  • A$0.40
  • B$2.40
  • C$5.60
  • D$6.40

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