The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour. FIGURE 13-1
-Refer to Figure 13-1.Suppose this firm has the marginal revenue product curve MRP₁.At a wage rate of $12,the profit-maximizing firm will hire ________ units of labour.

Question

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.

FIGURE 13-1
-Refer to Figure 13-1.Suppose this firm has the marginal revenue product curve MRP₁.At a wage rate of $12,the profit-maximizing firm will hire ________ units of labour.

Quizplus · Accepted Answer

The profit-maximizing firm will hire the amount of labour where the wage rate intersects with the MRP curve. At a wage rate of $12, the MRP is approximately $24. Therefore, the firm will hire 140 units of labour (where the MRP curve intersects with the wage rate of $12).

The Diagram Below Shows the MRP Curve for a Firm