Explanation There are many factors of production such as land, labor, capital, machinery, and so on. Labor is an important factor of production among them because it makes use of the available resources and transforms raw materials into finished goods and services. Thus, the productivity of labor is also very important. The marginal productivity is increase in the total productivity due to an increase in labor by one unit. Thus, it is the additional productivity due to an additional labor in the production process. The market condition is given as follows: Quantity of Labor (Thousands) Marginal Revenue Product Total Labor Cost 5 $25 $5 10 20 10 15 15 15 20 10 20 25 5 25 Option (c): The maximum quantity of labor that a firm is willing to hire is 25,000, which means the given value is equal to the actual value and that shows option 'c' is the correct answer...

The maximum hiring decision of a firm.

Micro Economics For Today

10th Edition

ISBN: 9781337613064

Author: Tucker, Irvin B.

Publisher: Cengage,

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Question

Chapter 11, Problem 7SQ

To determine

The maximum hiring decision of a firm.

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Similar questions

What is the marginal cost of labor for a firm that operates in a competitive labor market? How does this compare with the MCL for a monopsony?
What is a perfectly competitive labor market?
What determines the demand for labor for a firm operation in a perfectly competitive out market?
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?

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