Question

When a competitive firm maximizes profit, it will hire workers up to the point where thea. marginal product of labor is equal to the product price. b. value of the marginal product of labor is equal to the product price. c. value of the marginal product of labor is equal to the wage. d. marginal product of labor is equal to the wage.

Answer 1

Answer: The correct answer is "C. value of the marginal product of labor is equal to the wage."

Explanation:  

Assuming that a company operates in a market of perfect competition and that maximizes profits, this company will hire workers to the point where the value of the marginal product of labor is equal to the wage, because it is the point at which the costs of having an additional worker do not exceed the benefits of his incorporation.