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The perfectly competitive firm

The perfectly competitive firm - —would choose to hire 3...

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The perfectly competitive firm's profit-maximizing labor-demand decision is to hire workers up to the  point where the marginal revenue product of the last worker hired is  just equal  to the market wage  rate, which is the marginal cost of this last worker. For example, if the market wage rate is $50 per  worker per day, the firm—whose marginal revenue product of labor is given in Table 1
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Unformatted text preview: —would choose to hire 3 workers each day. The firm's labor demand curve. The firm's profit-maximizing labor-demand decision is depicted graphically in Figure 1 . Figure 1 A perfectly competitive firm's profit-maximizing labor-demand decision...
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