Asked by
Brandon Bisnath
on Nov 28, 2024
Verified
Answer the question on the basis of the data contained in the following table.Assume that the firm is hiring labor in a purely competitive market. Units of Labor Total Product 00115228339448555660ProductPrice$2.202.001.801.601.401.201.10\begin{array}{ccc}\begin{array}{ccc}\begin{array}{c}\text { Units of } \\\text { Labor }\\\hline\end{array} && \begin{array}{c}\text { Total } \\\text { Product }\\\hline\end{array} \\0 & & 0 \\1 & & 15 \\2 & & 28 \\3 & & 39 \\4 & & 48 \\5 & & 55 \\6 & & 60\end{array}\begin{array}{c}Product\\Price\\\hline \$ 2.20\\ 2.00 \\ 1.80 \\ 1.60 \\1.40 \\ 1.20 \\ 1.10 \end{array}\end{array} Units of Labor 0123456 Total Product 0152839485560ProductPrice$2.202.001.801.601.401.201.10 The given data reveal that:
A) the firm is selling its product in a purely competitive market.
B) the firm is selling its product in an imperfectly competitive market.
C) there is no level of output at which this firm can operate at a profit.
D) the law of diminishing returns is not applicable to this firm.
Purely Competitive Market
A market structure characterized by a large number of small firms, homogenous products, and free entry and exit, leading to price taking behavior.
Imperfectly Competitive Market
A market structure where individual sellers have some control over the price of their goods due to lack of perfect competition.
- Acquire an understanding of the implications of market configurations (pure competition versus imperfect competition) on resource requisition and labor recruitment.
Verified Answer
JS
Learning Objectives
- Acquire an understanding of the implications of market configurations (pure competition versus imperfect competition) on resource requisition and labor recruitment.