If a profit-maximizing firms marginal resource cost for labor is greater than its marginal revenue product, what should the firm do to maximize profits?

a) increase production until mrc = mrp
b) increase the price of its product in the output market
c) decrease its wage rate until mrc = mrp
d) decrease the amount of labor it employs until mrc = mrp
e) a firm in this scenario is earning supernormal profits and should not change its operation

Q&A Education