Suppose That a Competitive Firm Hires Labor Up to the Point

Multiple Choice

Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm. If the firm pays a wage of $700 per week and the marginal product of labor equals 10 units per week, then the marginal cost of producing an additional unit of output is

A) $7.
B) $70.
C) $700.
D) We do not have enough information to answer this question.