If a firm takes the wage as given,then the firm's marginal expenditure on labor curve is
A) above the labor supply curve.
B) below the labor supply curve.
C) the same as the labor supply curve.
D) upward sloping.

Question

Quizplus · Accepted Answer

If a firm takes the wage as given, then it will hire workers up to the point where the marginal cost of hiring an additional worker (i.e., the wage) equals the marginal revenue product of that worker. The labor supply curve represents the wage that workers are willing to work at, given their preferences and opportunity costs. Therefore, the firm's marginal expenditure on labor curve will be identical to the labor supply curve. This is because the firm cannot influence the wage - it must take it as given.

If a Firm Takes the Wage as Given,then the Firm's