Question

A firm will find it profitable to hire workers up to the point at which their rev: 06_21_2018 Multiple Choice marginal resource cost equals their wage rate. wage rate equals product price. MP is equal to their MRP. marginal resource cost is equal to their MRP.

Answer 1

Answer:

marginal resource cost is equal to their MRP

Explanation:

A business's profit will maximize when its marginal resource cost equals its marginal revenue product.

Marginal revenue product calculated by multiplying the marginal physical product (MPP) times the marginal revenue (MR), e.g. an additional worker can produce 10 units and each unit costs $10, MRP = 10 x $10 = $100

Marginal resource cost is the cost of using an additional unit of input, e.g. cost of hiring an additional worker.