For maximum profit, a firm hires labor up to the point at which the wage equals
(i)the value of the marginal product of labor.
(ii)the marginal cost of an additional unit of output.
(iii)output price multiplied by the marginal product of labor.
A)(i) and (ii) only
B)(i) and (iii) only
C)(ii) and (iii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

The firm maximizes profit by hiring labor until the wage equals the value of the marginal product of labor, which is the output price multiplied by the marginal product of labor.

For Maximum Profit, a Firm Hires Labor Up to the Point