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

Long-run costs and economies of scale — practice question

A firm is in perfect competition in both the product and the factor markets, with labour as the sole variable factor input. In the diagram, line JK represents the connection between the marginal physical product of labour and the man hours hired. The price of the product is $1.60. What number of man-hours will the firm hire if the hourly wage is $6.40?

  • A1000
  • B2000
  • C3000
  • D4000

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