Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week.
-Refer to Figure 18-1. Suppose the firm sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring
A)3 workers.
B)4 workers.
C)5 workers.
D)6 workers.

Question

Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 
-Refer to Figure 18-1. Suppose the firm sells its output for $20 per unit, and it pays each of its workers $1,250 per week. The firm maximizes profit by hiring
A)3 workers. 
B)4 workers. 
C)5 workers. 
D)6 workers.

Quizplus · Accepted Answer

The firm maximizes profit by hiring 3 workers because at this point, the marginal revenue product of labor is equal to the wage rate.

Figure 18-1 on the Graph, L Represents the Quantity of Labor and Labor