Suppose a profit-maximizing firm hires labour in a competitive labour market. If the value of marginal product of labour is less than the wage rate, the firm should

Question

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If the value of marginal product of labour is less than the wage rate, it means that the additional output produced by hiring an additional worker is less than the cost of hiring that worker. Therefore, hiring more workers would lead to a decrease in profit. The firm should decrease the quantity of labour it hires in order to maximize its profit.

Suppose a Profit-Maximizing Firm Hires Labour in a Competitive Labour