-(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) Which of the following statements is true? A) Bricklayers should be hired whenever the marginal revenue product of bricklayers is less than the marginal factor cost of bricklayers. B) The profit-maximizing condition for the firm hiring bricklayers is where MRP_BRICKLAYERS is greater than the MFC_BRICKLAYERS. C) The profit-maximizing condition for a firm hiring bricklayers is where MR_BRICKLAYERS equals the MFC_BRICKLAYERS. D) Bricklayers should be hired whenever the marginal factor cost of bricklayers is greater than the marginal revenue product of bricklayers.

Question

Quizplus · Accepted Answer

The profit-maximizing condition for a firm in a perfectly competitive labor market is when the marginal revenue product (MRP) of labor equals the marginal factor cost (MFC) of labor. This ensures that the firm is maximizing its profits by hiring additional labor up to the point where the cost of hiring an additional worker equals the additional revenue generated by that worker.