The optimal number of workers hired by a firm in a competitive labor market is determined by the quantity of labor associated with the following equation:

Question

Quizplus · Accepted Answer

The optimal number of workers hired by a firm in a competitive labor market is determined when the marginal revenue product (MRP) of labor equals the wage rate (w). This is because firms will continue to hire additional workers as long as the revenue generated by the last worker hired is at least equal to the cost of hiring that worker, which is the wage rate.

The Optimal Number of Workers Hired by a Firm in a Competitive