To maximise profit, a firm in a competitive labour market hires the quantity of labour that makes the _______ of labour equal to the _______.

Question

Quizplus · Accepted Answer

To maximize profit, a firm in a competitive labor market will hire labor up to the point where the value of the marginal product of labor equals the wage rate. This ensures that the cost of hiring an additional unit of labor is exactly balanced by the revenue generated by that unit, optimizing profit.

To Maximise Profit, a Firm in a Competitive Labour Market