Use the following to answer questions 5-7:
Table 13.1
-(Table 13.1) If the market wage is $25, the firm should hire _____ workers.
A) 5
B) 4
C) 3
D) 6

Question

Use the following to answer questions 5-7:
Table 13.1 
-(Table 13.1) If the market wage is $25, the firm should hire _____ workers.
A) 5 
B) 4 
C) 3 
D) 6

Quizplus · Accepted Answer

The marginal revenue product of labor is $30, which is greater than the market wage of $25. Therefore, the firm should hire more workers until the marginal revenue product of labor equals the market wage. This occurs when the firm hires 5 workers.

Use the Following to Answer Questions 5-7