Exhibit 26-4

Refer to Exhibit 26-4. How many units of labor should this firm employ?

Question

Exhibit 26-4 ​

Refer to Exhibit 26-4. How many units of labor should this firm employ?

Quizplus · Accepted Answer

At quantity 3, the marginal product of labor is at its highest point and the marginal cost of labor is equal to the price of labor, indicating that the firm should hire 3 units of labor. At any quantity higher or lower than 3, the marginal product of labor falls and the marginal cost of labor rises, resulting in lower profits for the firm.

Exhibit 26-4 ​ Refer to Exhibit 26-4. How Many Units of Labor Should

Exhibit 26-4 Refer to Exhibit 26-4. How Many Units of Labor Should