If the marginal product of labor equals the wages, firms should hire more workers.

Name: If the marginal product of labor equals the wages, firms should hire more workers.
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Question

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When the marginal product of labor equals the wage rate, a firm maximizes profit by not hiring additional workers, as the cost of hiring one more worker (the wage) equals the additional revenue generated by that worker (the marginal product). Hiring more workers beyond this point would decrease profit.

If the Marginal Product of Labor Equals the Wages, Firms