A competitive employer will hire inputs up to the point where the
A)marginal product of the input reaches a maximum.
B)price of the input equals the price of the output.
C)price of the input equals the marginal product of the input.
D)price of the input equals the marginal revenue product of the input.

Question

Quizplus · Accepted Answer

A competitive employer will hire inputs up to the point where the price of the input equals the marginal revenue product of the input. This is because the marginal revenue product represents the additional revenue generated by employing one more unit of the input, and it makes economic sense to hire more of the input as long as the revenue from doing so exceeds the cost of the input.

A Competitive Employer Will Hire Inputs Up to the Point