Figure 18-1
The figure represents the value of marginal product for a firm that sells its product in a competitive market.

-Refer to Figure 18-1.To maximize profit,what quantity of labour will a firm hire

Question

Figure 18-1
The figure represents the value of marginal product for a firm that sells its product in a competitive market.
 
-Refer to Figure 18-1.To maximize profit,what quantity of labour will a firm hire

Quizplus · Accepted Answer

The firm should hire labor up to the point where the value of the marginal product of labor equals the wage rate, which in this case is at quantity Q*. Beyond this point, the marginal cost of labor (the wage rate) exceeds the value of the marginal product of labor, leading to a decrease in profit. Therefore, the firm should hire Q* amount of labor to maximize profit.

Figure 18-1 the Figure Represents the Value of Marginal Product for a for a Firm