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Q. According to the rule of most favorable input usage, a firm should hire a person as long as her marginal revenue product is greater than her marginal cost to the corporation. It is well recognized that many companies have management training program in which new trainees are paid relatively high starting salaries and are not expected to make substantial contribution to the company until after the program is over (program may run between 6 to 18 months. As in compliance such type of training programs, clarify is a company violating the optimality rule?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9723412

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