Questions
Single choice
Profit maximising competitive firms hire labour until the wage is equal to
Options
A.a. marginal product
B.b. total product
C.c. change in total product
D.d. change in total revenue
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Step-by-Step Analysis
Let’s break down what each option implies about the firm’s hiring decision and the associated economic concept.
Option a: marginal product. This is the extra output produced by an additional unit of labor, not the extra revenue generated. A profit-maximising firm looks at output value, not just quantity of outp......Login to view full explanationLog in for full answers
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