Firms use information on labour's marginal revenue product to determine
A) how much to produce at each output price.
B) how many workers to hire at each wage rate.
C) how much marginal product to produce at each wage rate.
D) how much labour service to supply at each wage rate.

Question

Quizplus · Accepted Answer

Labour's marginal revenue product shows the additional revenue that an additional unit of labour will generate. Firms use this information to determine how many workers to hire at each wage rate, in order to have an optimal combination of labour and capital that maximizes profits.

Firms Use Information on Labour's Marginal Revenue Product to Determine