Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Find out more

Basic Question 10 of 13

A condition for profit maximization in a labor market is that ______

A. marginal revenue product equals the wage rate.
B. marginal revenue equals the wage rate.
C. marginal revenue product equals marginal cost.
Check Answer Previous Q Next Q Print

User Contributed Comments 5

User Comment
cahiz84 Why is the last one wrong?
mordja Because for Profit Maxization in a labor market to occur two conditions must be met :
1. MR = MC
2. MRP = Wage rate.

Not Marginal revenue product = Marginal Cost.
Mavizo Well explained , mordja.Thanks!!!
ascruggs92 Also, MRP = MR x MP. Because MR=MC, it is also true that MRP = MC x MP. So unless MC is equal to 1, MRP cannot equal MC
10425406 if that holds for labor then what of capital?
You need to log in first to add your comment.
Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

determine and interpret break even and shutdown points of production, as well as how economies and diseconomies of scale affect costs under perfect and imperfect competition

CFA® 2025 Level I Curriculum, Volume 1, Module 1.