Question

The least-cost hiring rule refers to:

                a.) firms that are wage setters                                                                                                                                   

               b.) a business hiring workers to the point where MRP = MRC                                                                     

                c.) the combination of labor and capital helping minimize total costs                                                        

                d.) measuring the cost a business must pay for using one more unit of a factor of production                                                                                                                                       

Answer 1

The goal of a firm is to maximise its profit, so the optimum input combination to produce a quantitity would be the one which will generate output at the cost which is minimum. This type of optimum combination would be the least cost combination of inputs. The least cost hiring refers to the combination of labour and capital helping in minimizing the total cost because this rule aims to find the best combination of capital and resources which will be the cheapest for the firm. Thus, the correct option is C.