Economics (AS & A Level) · May / June 2024 · Paper 32 · Question 14
9708Labour market forces and government intervention
When will a profit-maximising firm employ the optimum number of workers?
- Awhen the average revenue product of labour equals the average cost of hiring workers
- Bwhen the marginal revenue product of labour equals the average cost of hiring workers
- Cwhen the marginal revenue product of labour equals the marginal cost of hiring workers
- Dwhen the marginal revenue product of labour equals the trade union supplied cost of workers
As printed in the paper
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Correct answer: C. when the marginal revenue product of labour equals the marginal cost of hiring workers
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