To maximize profit, a competitive firm hires workers up to the point of intersection of the
A)marginal product curve and the wage line.
B)value of marginal product curve and the wage line.
C)value of marginal product curve and the marginal revenue curve.
D)total revenue curve and the wage line.

Question

Quizplus · Accepted Answer

The point of intersection of the value of marginal product curve and the wage line represents the point where the cost of hiring one more worker is equal to the additional revenue generated by that worker. At this point, the firm is maximizing its profits because hiring any more workers would cost more than the additional revenue generated. Therefore, choice B is the correct answer.

To Maximize Profit, a Competitive Firm Hires Workers Up to the Point