In a perfectly competitive labour market,a profit-maximizing firm will employ labour until the
A)MPP = MRP.
B)wage = MP.
C)MRP = the product's price.
D)wage = MRP.
E)wage = the product's price.

Question

Quizplus · Accepted Answer

In a perfectly competitive labor market, a profit-maximizing firm will hire workers until the marginal revenue product (MRP) of labor equals the wage rate, as this is the point where the cost of hiring an additional worker equals the revenue generated by that worker.

In a Perfectly Competitive Labour Market,a Profit-Maximizing Firm Will Employ