For the profit-maximizing competitive firm,the value of marginal product curve is

Question

Quizplus · Accepted Answer

The value of marginal product (VMP) curve shows the relationship between the quantity of labor employed by a firm and the marginal revenue product (MRP) of labor. The profit-maximizing firm will hire labor up to the point where the MRP is equal to the wage rate. Therefore, the VMP curve is equivalent to the labor demand curve for the firm. Option D is the correct answer as it correctly identifies the relationship between VMP and labor demand. Options A, B, and C are incorrect as they do not accurately describe the VMP curve or its relationship to labor demand.

For the Profit-Maximizing Competitive Firm,the Value of Marginal Product Curve