Please explain your answer. 14. The competitive firm's profit-maximizing quantity of labor is the quantity where:...
Please explain your answer.
14. The competitive firm's profit-maximizing quantity of labor is the quantity where:
A. the quantity of the marginal product of labor is equal to the market wage.
B. the value of the marginal product of labor is equal to the profit.
C. the value of the marginal product of labor is equal to the market wage.
D. the quantity of the marginal product of labor is equal to zero.
Homework Answers
MP = Change in TP per unit increase in labor
VMPL = MP * Price of product
A firm hires labors until value added/produced by one labor is more than or equal to the cost of one labor ie wage
So firm hires labor until VMPL > = Wage rate
option C is the correct answer
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Please explain your answer.
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