Question

When the producer should stop employing more labour?

Answer 1

Answer:

The producer should know when and when not to hire;

Explanation:

• The producer who is also the employer, should stop employing more labor when the marginal revenue product of labor is same with the wage rate.

• Consequently, an employer should hire more labor when the marginal revenue product of labor is higher than the wage rate. At this point, the employer is adviced to increase his labor resource to meet the production means.