For a competitive,profit-maximizing firm,what is the labour demand curve also known as

Question

Quizplus · Accepted Answer

The labour demand curve is also known as the value of marginal product (VMP) curve. This curve represents the additional revenue generated by each additional unit of labor. A competitive, profit-maximizing firm will hire labor until the VMP equals the wage rate. The marginal cost curve represents the additional cost of producing each additional unit of output, the production function shows the maximum output that can be produced with a given amount of inputs, and the profit function shows the relationship between profits and output. Of all these options, the VMP curve is the only one that directly relates to labor demand.

For a Competitive,profit-Maximizing Firm,what Is the Labour Demand Curve Also