QUESTION $8$

Exhibit $11-5$ A perfectly competitive labor market

$$

Quantity of Labor

$($thousands$)$

Marginal Revenue Product

Wage Rate

$5$ $$25\mathrm{.}00$ $ $5\mathrm{.}00$

$1020\mathrm{.}0010\mathrm{.}00$

$1515\mathrm{.}0015\mathrm{.}00$

$2010\mathrm{.}0020\mathrm{.}00$

$255\mathrm{.}0025\mathrm{.}00$

$$

$$

In Exhibit $11-5,$ when the marginal revenue product is $$20\mathrm{.}00,$ firms should:

a$.$

start firing workers.

b$.$

continue hiring workers.

c$.$

pay a wage above $$15\mathrm{.}00$ to its workers.

d$.$

stop hiring workers.