Asked by

Syeda Jamal
on Nov 16, 2024

verifed

Verified

When a competitive firm hires labor up to the point at which the value of the marginal product of labor equals the wage, it also produces up to the point at which the price of output equals average variable cost.

Marginal Product

The additional output resulting from the use of one more unit of a variable input, while holding other inputs constant.

Variable Cost

Variable cost is the type of cost that varies with the level of output or production, such as materials and labor costs.

  • Understand the relationship between value of marginal product of labor, wage, and firm's hiring decision.
verifed

Verified Answer

AJ
Aurora JimenezNov 23, 2024
Final Answer:
Get Full Answer