If a monopolist has an output price of $10, marginal revenue equal to $4, and faces a fixed wage of $6, he or she should hire labor until the marginal revenue product is equal to

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The monopolist should hire labor until the marginal revenue product (MRP) is equal to the wage rate. The MRP is equal to the marginal revenue (MR) multiplied by the marginal product of labor (MPL). In this case, the given MR is $4 and the monopolist should set the MPL such that MRP = $6. Therefore, the monopolist should hire labor until MPL = $6/$4 = 1.5.

If a Monopolist Has an Output Price of $10, Marginal