According to the rational rule, what output and price should the firm in the following example choose quantity= 4; price= $7
The foundation of rational choice theory, an economics theory that holds that people always choose options that maximize their own value, is rational behavior. Given the options available, these choices offer consumers the greatest benefit or enjoyment.
The Rational Rule for Employers advises hiring more people if an increase in output is desired and wages are declining since the marginal revenue product is greater than (or equal to) the pay.
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