We observes a profit-maximizing firm hiring its 51st employee.It is possible to infer that,when 50 employees are hired,the

Question

Quizplus · Accepted Answer

A profit-maximizing firm will continue to hire employees until the value of the marginal product of labor equals the wage rate. If the firm is hiring its 51st employee, it suggests that the value of the marginal product of labor for the 50th employee was greater than or equal to the wage rate, since the firm would not have continued to hire if it was losing money on each employee. Therefore, choice B is correct.

We Observes a Profit-Maximizing Firm Hiring Its 51st Employee