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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
At what point will a profit-maximizing firm decide to hire additional labor?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
A firm aiming to maximize profit will continue employing labor until the cost of hiring an additional worker (marginal cost) is equal to the extra output produced by that worker (marginal product). This ensures that the cost of labor is justified by the value of the output generated.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?