question archive A competitive employer will hire inputs up to the point where the Multiple Choice marginal product of the input reaches a maximum
A competitive employer will hire inputs up to the point where the Multiple Choice marginal product of the input reaches a maximum
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A competitive employer will hire inputs up to the point where the
Multiple Choice
marginal product of the input reaches a maximum.
price of the input equals the price of the output
price of the input equals the marginal product of the input
price of the input equals the marginal revenue product of the input
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Answer: price of the input equals the marginal revenue product of the input
Ie. Price of the input is nothing but a Marginal cost.
A Competitive employer always wish to achieve optimum level of output. It can be only achieved at the point where marginal revenue equals to the marginal cost ie. (MR = MC). It is the level where total revenue will be maximum. But if he further tires to hire inputs above the optimum level, further production of marginal product would leads to marginal loss, and that is not desirable.
