Firms will continue to hire workers as long as:

Question

Quizplus · Accepted Answer

Hiring workers will be profitable for firms only if the value of the marginal product (the additional output produced by an additional unit of labour) exceeds the marginal cost of hiring labour (the additional cost incurred by hiring an additional unit of labour). Therefore, B is the best choice. A is incorrect because making a profit does not require hiring workers, and C is incorrect because the wage being below the product price does not necessarily mean that hiring workers will be profitable. D is incorrect because eventually, there will be diminishing returns to labour.

Firms Will Continue to Hire Workers as Long As