If a worker can produce 20 units of output which can be sold for $4 per unit, the maximum wage that the firm should pay to hire this worker is
A)$80
B)$80 minus the firm's profit markup
C)It depends on what the going wage rate is in the labour market.
D)There is insufficient information to answer the question.

Question

Quizplus · Accepted Answer

The maximum wage the firm should pay is equal to the total revenue generated by the worker, which is 20 units at $4 each, totaling $80. This does not account for profit markup or labor market conditions, as the question asks for the maximum wage based on output value alone.

If a Worker Can Produce 20 Units of Output Which