Which of the following equations is true of a profit-maximizing firm?

Question

Quizplus · Accepted Answer

A profit-maximizing firm will hire workers up to the point where the value of their marginal product (VMP) equals the wage rate. This is because the VMP represents the additional revenue that each additional worker generates for the firm, and hiring more workers increases costs (in the form of wages). Therefore, the firm will stop hiring when the VMP equals the wage rate, which ensures that the firm is maximizing its profits. So, the correct equation is Wage = The value of a worker's marginal product (D).

Which of the Following Equations Is True of a Profit-Maximizing