Average revenue product and marginal revenue product are plotted in Figure 13.2. It should be remembered that in constructing this figure (and in keeping with the spirit of neo-classical economics), it has been assumed that the product is being sold in a perfectly competitive market where the firm can sell as much as it likes at the going market price.
If this information is available to the firm, it is possible to determine the optimal number of workers to hire. As long as the workers are bringing in more revenue than it costs to hire those workers (i.e. the marginal revenue product is greater than the wage),