Which of the following statements is correct?
A)The value of the marginal product curve is the labor demand curve for competitive, profit-maximizing firms.
B)A competitive, profit-maximizing firm hires workers up to the point where the value of the marginal product of labor equals the wage.
C)By hiring labor up to the point where the value of the marginal product of labor equals the wage, the firm is producing where price equals marginal cost.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

All of the statements are correct. A competitive, profit-maximizing firm hires workers up to the point where the value of the marginal product of labor equals the wage, which is the labor demand curve. By producing where price equals marginal cost, the firm maximizes its profits, which is the goal of profit-maximizing firms.

Which of the Following Statements Is Correct