In the labor market, employers hire workers as long as the:

Question

Quizplus · Accepted Answer

The marginal revenue product of labor is the additional revenue generated by hiring one more worker. As long as the wage rate is below the marginal revenue product of labor, employers can increase their profits by hiring more workers. Therefore, option B is the correct answer. Option A is incorrect because it implies that employers only hire workers when the average product of labor is equal to the wage rate, which is not necessarily true. Option C is incorrect because if the average product of labor is zero, it means that no output is produced regardless of the wage rate. Option D is incorrect because if the marginal product of labor is zero, it means that hiring more workers does not increase output, which is not the condition for employers to hire workers. Option E is incorrect because employers would not pay more than the extra revenue generated by hiring an additional worker.

In the Labor Market, Employers Hire Workers as Long as The