Use the following to answer question:
-(Table: Value of the Marginal Product of Labor and Demand)Use Table: Value of the Marginal Product of Labor and Demand.In the table,the total product of labor is shown for the hourly production of power cords.Assume that the market for power cords is perfectly competitive.The price of a power cord is $2,the market wage rate is $20 per hour,and 8 workers are hired.Profit can be maximized by hiring _____ worker(s).
A)1 more
B)2 more
C)1 fewer
D)2 fewer

Question

Use the following to answer question: 
-(Table: Value of the Marginal Product of Labor and Demand)Use Table: Value of the Marginal Product of Labor and Demand.In the table,the total product of labor is shown for the hourly production of power cords.Assume that the market for power cords is perfectly competitive.The price of a power cord is $2,the market wage rate is $20 per hour,and 8 workers are hired.Profit can be maximized by hiring _____ worker(s).
A)1 more 
B)2 more 
C)1 fewer 
D)2 fewer

Quizplus · Accepted Answer

To maximize profit, the firm should hire workers until the value of the marginal product of labor (VMPL) equals the wage rate. If 8 workers are hired and the VMPL of the 8th worker is less than $20, then hiring fewer workers would increase profit.

Use the Following to Answer Question