When the competitive firm\'s value of the marginal product of labor intersects t
ID: 1120721 • Letter: W
Question
When the competitive firm's value of the marginal product of labor intersects the market-wage level, the firm:
has found the profit-maximizing quantity of labor to hire.
can increase its profits by hiring any amount less than this point.
can increase its profits by hiring any amount greater than that point.
None of these statements is true.
A.has found the profit-maximizing quantity of labor to hire.
B.can increase its profits by hiring any amount less than this point.
C.can increase its profits by hiring any amount greater than that point.
D.None of these statements is true.
Explanation / Answer
Answer
A
has found the profit-maximizing quantity of labor to hire
The profit-maximizing higher is at MRP=wage, because the MC=P at the same place, the P is found by P=wage /MP.
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