Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market

-(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) Assume that the market determined price of bricklayers is $100.For a profit-maximizing firm at the equilibrium level of output, the MRPBRICKLAYERS is:
A) $200.
B) equal to the MFCBRICKLAYERS.
C) the supply curve for the firm hiring bricklayers.
D) irrelevant, since the firm is a price taker.

Question

Use the following to answer question(s): Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market
 
-(Exhibit: Demand and Supply of Bricklayers in a Perfectly Competitive Labor Market) Assume that the market determined price of bricklayers is $100.For a profit-maximizing firm at the equilibrium level of output, the MRPBRICKLAYERS is:
A) $200. 
B) equal to the MFCBRICKLAYERS. 
C) the supply curve for the firm hiring bricklayers. 
D) irrelevant, since the firm is a price taker.

Quizplus · Accepted Answer

In a perfectly competitive labor market, the marginal revenue product (MRP) of labor is equal to the wage rate, which is determined by the market. Since the firm is a price taker, it will hire workers up to the point where MRP equals the marginal factor cost (MFC), which is also the wage rate in this case, $100.

Use the Following to Answer Question(s): Demand and Supply of Bricklayers