An employer in a perfectly competitive market should hire additional labour as long as:

Name: An employer in a perfectly competitive market should hire additional labour as long as:
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Question

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In a perfectly competitive market, the marginal revenue product (MRP) is equal to the wage rate for each additional unit of labour. Therefore, an employer should only hire additional labour as long as the MRP exceeds the wage rate, as this will result in a positive contribution to the employer's profits.

An Employer in a Perfectly Competitive Market Should Hire Additional