-In the table above, if the wage rate is $8 per hour, the profit- maximising number of workers is

Question

Quizplus · Accepted Answer

The profit-maximizing number of workers is determined by comparing the wage rate to the marginal product of labor. Without the table, the correct answer cannot be determined directly. However, assuming choice A (4) is correct, it implies that at 4 workers, the additional output (marginal product) generated by the fourth worker, when sold, generates revenue equal to or greater than the wage rate ($8), but adding a fifth worker does not. This is a standard economic principle where firms hire up to the point where the cost of hiring an additional worker (the wage rate) equals the revenue generated by that worker's output.

-In the Table Above, If the Wage Rate Is $8