A profit maximizing firm will hire additional workers until the additional cost associated with hiring the last worker equals the average wage rate of the workers. the additional cost associated with hiring the last worker equals the additional revenue generated by that worker. the extra revenue generated by the last worker hired equals zero. the extra cost associated with hiring the last worker equals the price of the good produced.
Added by Anthony A.
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A profit-maximizing firm aims to maximize its profits by making decisions that increase the difference between total revenue and total costs. Show more…
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perfectly competitive firm should hire an additional worker only if Total revenue is less than total cost_ The worker's marginal revenue product is less than the wage rate The worker's marginal product falls. the worker's marginal product rises _ the worker's marginal revenue product exceeds the wage rate_
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If, hiring another worker would increase output by three units per hour, then to maximize profits the firm should not change the number of workers it currently hires. not hire an additional worker. hire another worker. There is not enough information to answer the question.
Andrew D.
'Why does a profit-maximizing firm hire workers up to the point where the wage equals the value of marginal product? Show that this condition is identical to the one that requires a profit maximizing firm to produce the level of output where the price of the output equals the marginal cost of production:'
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