Firms hire labour at the point where
A)the nominal wage is equal to the marginal revenue product of labour.
B)the real wage is equal to the marginal product of labour.
C)the cost and the benefit of hiring additional labour are the same.
D)all of the above.

Question

Quizplus · Accepted Answer

Firms hire labour at the point where the cost and the benefit of hiring additional labour are the same. This is the point where the marginal revenue product of labour is equal to the real wage.

Firms Hire Labour at the Point Where