If the value of the marginal product of labor exceeds the wage rate, then a competitive, profit-maximizing firm would want to hire less labor.

Question

Quizplus · Accepted Answer

If the value of the marginal product of labor exceeds the wage rate, then a competitive, profit-maximizing firm would want to hire more labor, not less. This is because each additional worker is adding more value to the firm than what they are being paid, resulting in an increase in profits for the firm.

If the Value of the Marginal Product of Labor Exceeds