Firms will continue to hire workers as long as:
A)they make a profit.
B)the value of the marginal product is greater than the marginal cost of hiring labor.
C)the wage is below the product price.
D)there are no diminishing returns.

Question

Quizplus · Accepted Answer

Firms will continue to hire workers as long as the value of the marginal product (how much each additional worker adds to production) is greater than the cost of hiring more workers, which includes wages plus any additional costs such as training or benefits. As long as this condition is met, the firm can continue to increase its profits by hiring more workers. Choices A, C, and D are not necessarily true and do not fully capture the decision-making process of firms in hiring workers.

Firms Will Continue to Hire Workers as Long As