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Question
Consider two situations: In situation A the production of widgets is monopolized by a single firm. In situation B the production of widgets is perfectly competitive. In both situations the supply of labor to widget makers is infinitely elastic at a wage of w. In this case, the product
a. will be the same in the two cases.
b. will be higher in case B than in case A.
c. will be higher in case A than in case B.
d. From the information given it is not possible to make a definite statement about the marginal value product of labor.
Answer
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