A profit-maximizing firm should hire workers up to the point where labour's marginal revenue product equals the wage rate.

Question

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A profit-maximizing firm would want to hire workers up to the point where the additional output produced by the last worker hired (marginal revenue product) is equal to the cost of their wage rate. This would ensure that the firm is getting the highest possible profit by balancing the cost of labor with the amount of output produced by the workers.

A Profit-Maximizing Firm Should Hire Workers Up to the Point