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MMLU-Pro / 6867 / Explain how the MC = MR rule can be applied to the hiring of laborin a perfectly…

Problem

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question

Explain how the MC = MR rule can be applied to the hiring of laborin a perfectly competitive market.

category

economics

options

  1. Firms hire an unlimited number of workers as long as they contribute any positive amount to total revenue.
  2. In a perfectly competitive market, firms don't hire workers based on MRC = MRP rule.
  3. MRC = MRP for labor and a firm will pay each worker a wage equal to the MRP of the last worker hired.
  4. Firms hire workers until the wage rate is equal to the average cost of labor.
  5. Firms hire workers based on a fixed wage, regardless of marginal revenue or marginal costs.
  6. Firms pay each worker a wage equal to the total revenue of the company.
  7. Marginal revenue product of labor is ignored, and firms focus on minimizing the average cost of labor per worker.
  8. Firms hire workers until the marginal cost of labor exceeds the marginal revenue product of labor.
  9. Each worker's wage is set by the average revenue product of all workers combined.
  10. MRC = MRP and firms pay each worker a wage higher than the MRP of the last worker hired.

src

stemez-Economics

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