This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Why does a firm maximize its profits by hiring so that VMP = W? What will be an ideal ... (Read 62 times)

Pineappleeh

  • Hero Member
  • *****
  • Posts: 585
on: Jun 29, 2018
Why does a firm maximize its profits by hiring so that VMP = W?
 
  What will be an ideal response?

Question 2

What does elasticity measure?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

manuelcastillo

  • Sr. Member
  • ****
  • Posts: 304
Reply #1 on: Jun 29, 2018
Answer to Question 1

The VMP represents the additional revenue generated by the last worker. The wage is the cost of the last worker. If VMP > W, then an additional worker adds more to revenue than to cost and so hiring the worker boosts the firm's profit. Conversely, if VMP < W, then decreasing labor reduces costs more than it reduces revenue and thereby decreasing the quantity of labor it employs raises the firm's profit. Only when VMP = W can no other level of labor create a greater profit.

Answer to Question 2

Elasticity measures the response in one variable when another variable changes.


Pineappleeh

  • Member
  • Posts: 585
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

steff9894

  • Member
  • Posts: 337
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Disorders that may affect pharmacodynamics include genetic mutations, malnutrition, thyrotoxicosis, myasthenia gravis, Parkinson's disease, and certain forms of insulin-resistant diabetes mellitus.

Did you know?

People with high total cholesterol have about two times the risk for heart disease as people with ideal levels.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

Adults are resistant to the bacterium that causes Botulism. These bacteria thrive in honey – therefore, honey should never be given to infants since their immune systems are not yet resistant.

Abdominal thrusts are delivered with a firm thrust into the patient’s abdomen with an upward ... Abdominal thrusts are delivered with a firm thrust into the patient’s abdomen with an upward ...
Greet a First-Time Client With a Firm Handshake. Greet a First-Time Client With a Firm Handshake.
The hazmat training pyramid. It is important to train from the ground up, starting with a firm grasp ... The hazmat training pyramid. It is important to train from the ground up, starting with a firm grasp ...
Firm handshake Firm handshake
A very light ideal spring stretches by when it is used to hang a 135-N object. What is the ... A very light ideal spring stretches by when it is used to hang a 135-N object. What is the ...
For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately
Video: Calvin cycle (The light-independent reactions )

For a complete list of videos, visit our video library