Question

Due to the ________, a firm strives to maximize its profits and will therefore never pay more for a worker than the value of his/her marginal productivity to the firm

Answer 1

Due to the first rule of labor markets, a firm strives to maximize its profits and will therefore never pay more for a worker than the value of his/her marginal productivity to the firm. Therefore, the option A holds true.

What is the significance of profit maximization?

A process of following and adapting such methods that derive maximum revenue to the firm is known as profit maximization. It should be the primary goal of any firm in the market.

The first rule of labor markets says that when a firm strives for profit maximization, it does not pay the worker or the labor, more than the marginal productivity that the worker bring to the firm.

Therefore, the option A holds true regarding profit maximization.

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The question seems to be missing. The complete question has been added for better reference.

Due to the ________ a firm strives to maximize its profits and will therefore never pay more for a worker than the value of his/her marginal productivity to the firm.

a. first rule of labor markets

b. demand product value

c. third rule of labor markets