A. loss
B. super normal profit
C. normal profit
D. higher revenue
Correct Answer: Option B
B. super normal profit
Explanation
MRP = Marginal Revenue Product
ARP = Average Revenue Product
Therefore, if the wage rate is less than the ARP, the firm will make super-normal profit. As a result, new firms will enter the industry and the demand for labour will increase which will push up the wage rate so as to be equal to the ARP.
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