To maximise profit, a competitive firm hires workers up to the point where the:

Question

Quizplus · Accepted Answer

The marginal product of labor is the additional output that each additional worker produces, and the value of the marginal product is the additional revenue generated by each additional worker. The wage curve represents the cost of hiring additional workers, which increases as more workers are hired. Therefore, to maximize profit, a competitive firm should hire workers up to the point where the value of the marginal product equals the wage. This is where the value of the marginal product and the wage curves intersect, as stated in option C.

To Maximise Profit, a Competitive Firm Hires Workers Up to the Point