[Economics] If MRP = VMP = MFC = wages, then the firm is?

Question

Please help me out with my hw!

If MRP = VMP = MFC = wages, then the firm is

A. selling its product in a perfectly competitive market and is hiring its labor in a perfectly competitive labor market.

B. selling its product in a perfectly competitive market but is not hiring its labor in a perfectly competitive labor market.

C. not selling its product in a perfectly competitive market but is hiring its labor in a perfectly competitive labor market.

D. neither selling its product in a perfectly competitive market nor hiring its labor in a perfectly competitive labor market.

is it... A? no?

68

Answer 1

A. selling its product in a perfectly competitive market and is hiring its labor in a perfectly competitive labor market.

MRP=VMP means that product market is perfectly competitive

MFC=W means perfect competition on factor market (horizontal labor-supply)