Practice mode Income Inequality

In a competitive labour market, firms hire workers up to the point where the marginal revenue product of labour equals what?

Correct answer A. The wage rate

Explanation

In a competitive labour market each extra worker costs the market wage. Hiring is profitable while the revenue a worker adds exceeds that wage, so firms stop where MRP equals the wage.

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In a competitive labour market, firms hire workers up to the point where the marginal revenue product of labour equals what?

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In a competitive labour market, firms hire workers up to the point where the marginal revenue product of labour equals what?

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