Because the value of marginal product diminishes as the quantity of labor employed increases, the ________ the wage rate, the ________ workers the firm hires.

Question

Quizplus · Accepted Answer

As the wage rate decreases, the cost of hiring additional workers becomes more affordable for the firm, leading to an increase in the number of workers hired, despite the diminishing marginal product of labor.

Because the Value of Marginal Product Diminishes as the Quantity