Assuming the standard criteria for profit maximisation, a competitive firm's final good price will equal the wage paid to labourers divided by their marginal product.

Question

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The marginal product of labor is the additional output produced by hiring one more unit of labor. The wage paid to laborers is the cost of hiring one more unit of labor. In a competitive market, firms will hire labor up to the point where the marginal product of labor equals the wage. This is because hiring more labor beyond this point would increase the firm's costs without increasing its output.

Assuming the Standard Criteria for Profit Maximisation, a Competitive Firm's