In a perfectly competitive labour market, a profit- maximizing firm will employ labour until the

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. This is because the firm will continue to hire additional labor as long as the revenue generated by the last worker hired (MRP) is greater than or equal to the cost of hiring that worker (wage).

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