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Your boss is trying to decide whether to buy out a rival company, and asks for your advice. The boss says that the rival will
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Answer #1

The answer is true because here the Marginal product of labor is less than the wage given to the labor. The labor should be pushed to produce more so that they could be efficient. Also when marginal product of labor is greater than average product of labor, average product of labor is increasing. The returns become zero when marginal product of labor becomes zero and average product of labour starts to fall. So this rival company has a scope to become more efficient and boss should buy the rival.

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