In a competitive labor market, what is the profit-maximizing number of workers that a firm will hire?
What will be an ideal response?
In competitive markets, firms will hire labor up to the point where the value of the marginal product of labor is equal to the market wage. The value of the marginal product of labor is the contribution of labor to the firm's revenues, while the wage is the cost of labor. So, firms will hire up to the point where the additional revenue is equal to the additional cost of hiring one more worker.
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Which of the following statements is TRUE for both a competitive market and a single-price monopoly?
A) The firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost. B) The firm can make an economic profit in the long run. C) The price is set where the supply curve and demand curve intersect. D) The firm always produces at the lowest possible long-run average cost.
Corporate profits is the largest category of national income
Indicate whether the statement is true or false