Asked by Brady Kelly on Jul 20, 2024
Verified
A competitive employer should hire additional labor as long as:
A) the MRP exceeds the wage rate.
B) the wage rate is less than MP.
C) average product exceeds MP.
D) MC exceeds MR.
MRP
Material Requirements Planning, a system for calculating materials and scheduling production to ensure that components are available for production and finished goods for delivery.
Wage Rate
The amount of compensation an employee receives in exchange for performing a specific job, typically expressed per hour or year.
- Assess the association between the implementation of MRP and how firms decide on new hires.
Verified Answer
IG
Inkera GrierJul 24, 2024
Final Answer :
A
Explanation :
A competitive employer should hire additional labor as long as the marginal revenue product (MRP) exceeds the wage rate. This means that the additional revenue generated by the new worker should be greater than the cost of hiring them (the wage rate). If MRP is less than the wage rate, then hiring more workers would result in a loss for the employer. B is incorrect because MP (marginal product) is not directly relevant to hiring decisions. C is also incorrect because average product is not a good measure of productivity for an individual worker. D is irrelevant to the question of whether to hire additional labor.
Learning Objectives
- Assess the association between the implementation of MRP and how firms decide on new hires.