(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords.The price of a power cord is $2, the market wage rate is $40 per hour, and four workers are hired.Profit can be maximized by hiring worker(s).
A)one more
B)two more
C)one fewer
D)two fewer

Question

Quizplus · Accepted Answer

The profit can be maximized by hiring one more worker because the value of the marginal product of labor is still greater than the wage rate when the fourth worker is hired. Hiring more than one worker will result in a decrease in the value of the marginal product of labor, leading to a decrease in profit.