To maximize profits,a firm will employ workers until for the last worker employed:
A)marginal product of labor is equal to the nominal wage rate.
B)the value of the marginal product of labor is equal to the wage rate.
C)the value of the marginal product of labor is equal to the price per unit of output.
D)the value of the marginal product of labor is as high as possible.

Question

Quizplus · Accepted Answer

Employing workers until the value of the marginal product of labor is equal to the wage rate will maximize profits, because any additional worker hired after this point will add less to revenue than the cost of their wages, resulting in decreased profits.

To Maximize Profits,a Firm Will Employ Workers Until for the Last