question 11\nin a perfectly competitive labor market, a firm will maximize profit when it hires workers…

question 11\nin a perfectly competitive labor market, a firm will maximize profit when it hires workers until\na) marginal product equals marginal cost\nb) marginal revenue product equals the wage\nc) marginal revenue equals marginal revenue product\nd) marginal cost equals total revenue\ne) marginal product equals marginal revenue

question 11\nin a perfectly competitive labor market, a firm will maximize profit when it hires workers until\na) marginal product equals marginal cost\nb) marginal revenue product equals the wage\nc) marginal revenue equals marginal revenue product\nd) marginal cost equals total revenue\ne) marginal product equals marginal revenue

Answer

Brief Explanations:

In a perfectly - competitive labor market, a firm maximizes profit by hiring workers until the marginal revenue product (MRP) of labor equals the wage rate. MRP is the additional revenue a firm earns by hiring one more unit of labor. When MRP = wage, the firm is getting exactly the same amount of additional revenue as the additional cost (wage) of hiring an extra worker. If MRP > wage, the firm can increase profit by hiring more workers, and if MRP < wage, the firm can increase profit by reducing the number of workers.

Answer:

B. marginal revenue product equals the wage