Which rule does the United Corporation use when maximizing profit?

Question

Quizplus · Accepted Answer

The United Corporation uses the rule of hiring labor up to the point where the value of the marginal product of labor equals the wage rate. This is because at this point, the additional revenue generated by hiring an additional unit of labor is equal to the additional cost incurred in the form of wages paid to that labor unit. Any further increase in labor units hired would result in a decrease in profit for the firm. Therefore, the profit-maximizing level of labor employment is where the value of the marginal product of labor equals the wage rate.

Which Rule Does the United Corporation Use When Maximizing Profit