If both the goods and the labor market are perfectly competitive,a firm hires labor up to the point where the value of the marginal product of labor equals the wage rate and produces at a point where price is ________.

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In perfect competition, a firm produces where marginal cost equals price, therefore the firm produces where price is equal to marginal cost. In addition, in a perfectly competitive labor market, a firm hires labor up to where the value of the marginal product of labor equals the wage rate.

If Both the Goods and the Labor Market Are Perfectly