A firm will reduce its quantity of labor as long as the MRP of labor ________ the market wage rate.
A) is greater than or equal to
B) is less than
C) is equal to
D) determines

Question

Quizplus · Accepted Answer

A firm will reduce its quantity of labor when the Marginal Revenue Product (MRP) of labor is less than the market wage rate, as it indicates that the cost of hiring an additional unit of labor is greater than the revenue generated by that unit.

A Firm Will Reduce Its Quantity of Labor as Long