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When the labor market is not perfectly competitive, labor will be hired up to the point where the _____ of labor equals the _____.

A. marginal revenue product; marginal revenue

B. marginal product; market wage

C. marginal revenue product; marginal factor cost of labor

D. marginal product; marginal factor cost of labor

pur-new-sol

The correct answer is Option C - marginal revenue product; marginal factor cost of labor .

When the product market is not perfectly competitive, labor is hired to a point at which marginal revenue product is equal to marginal factor cost of labor.
Marginal revenue production is the additional revenue generated by hiring one additional unit of labor.The marginal factor of labor is the cost incurred on hiring one more labor.
As long as marginal revenue product is more than the marginal cost of labor, the firm will keep on hiring labor because additional labor generates more revenue than cost.

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