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to the point where MRP=MC
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Why is demand for labor curve downward sloping?
I believe in economics we assume that firms are rational and because of this a rational firm would not employ additional labor if it caused a decline in the total output of the firm.
Until when does a profit maximizing firm use additional units of resources for production?
Until it reaches the point of diminishing returns. After that point, one additional unit of resources cannot be used profitably.
A firm will only employ additional workers to what point?
When the marginal gains from hiring that employee are less than the cost of the employee. I.e. if the employee costs $40,000, but the firm only nets $30,000, that employee will not be hired. _____ Theoretically, when the value produced by that worker, or their return on investment isn't high enough... but that gets mixed up with a lot of political stuff plus a desire to make money without regard to improvement of the product, so sometimes the resultant value isn't even factored in. Spending is just frozen unless it inhibits the decision-maker's personal goals.
What is the additional revenue that accrues to a firm when an additional worker is hired?
marginal revenue product
What are a firms profit at the break-even point?
Break Even Point: It is the point where firm's at no profit no loss situation/position that's why it is called break-even point. So at this point firms has no profit no loss and it is the point where firm's able to achieved all expenses of operation and after this point whatever sales made by firm goes to profit of company.
How do companies determine wages for employees?
By the equilibrium between supply and demand for workers
Why is demand for labor curve downward sloping?
I believe in economics we assume that firms are rational and because of this a rational firm would not employ additional labor if it caused a decline in the total output of the firm.
Until when does a profit maximizing firm use additional units of resources for production?
Until it reaches the point of diminishing returns. After that point, one additional unit of resources cannot be used profitably.
A firm will only employ additional workers to what point?
When the marginal gains from hiring that employee are less than the cost of the employee. I.e. if the employee costs $40,000, but the firm only nets $30,000, that employee will not be hired. _____ Theoretically, when the value produced by that worker, or their return on investment isn't high enough... but that gets mixed up with a lot of political stuff plus a desire to make money without regard to improvement of the product, so sometimes the resultant value isn't even factored in. Spending is just frozen unless it inhibits the decision-maker's personal goals.
What can happen if the MRP is greater then a firm's MC?
The firm can afford to hire more workers
What can happen if the MRP is greater than a firm's MC?
The firm can afford to hire more workers.
What is the additional revenue that accrues to a firm when an additional worker is hired?
marginal revenue product
What is the additional revenue a firm gains when it hires an additional worker called?
Marginal Revenue Product
What is additional revenue a firm gains when it hires an additional worker called?
Marginal Revenue Product
Is it wise for firm to employ a worker at 20 per hour when another worker does the same job for 10 per hour?
There may be many reasons for it - some good, some bad and some in between: One of them is the owner's relative; The higher paid worker is more skilled (or faster); The two workers may be in different locations - with different employment rates and costs of living (that is the whole point of multinationals sourcing overseas!). The firm may have to justify its decision to anti-discriminatory agencies.
How does specialization by workers benefit the firm's employing them?
Workers who specialize become more efficient and thereby increase productivity.
What is a group of people who work for a shop or college or firm called?
workers
