If MFC $\mathrm { MRP } _ { L }$ ,the firm should

Name: If MFC > $\mathrm { MRP } _ { L }$ ,the firm should
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Question

If MFC > $\mathrm { MRP } _ { L }$ ,the firm should

Quizplus · Accepted Answer

If the marginal factor cost (MFC) of labor is greater than the marginal revenue product (MRP) of labor, the firm is paying more for an additional worker than the revenue that worker generates, so it should reduce the number of workers to maximize profit.

If MFC > MRPL\mathrm { MRP } _ { L }MRPL​

If MFC > $\mathrm { MRP } _ { L }$