In a perfectly competitive labor market, firms hire workers until the _______ of labor equals the marginal factor cost of hiring that labor.

In a perfectly competitive labor market, firms hire workers until the marginal product of labor equals the marginal factor cost of hiring that labor. The marginal product of labor is the extra output produced by one more worker, while the marginal factor cost is the cost of hiring that additional worker. When these two values are equal, firms maximize their profits because they are getting the most benefit from each worker they hire. For example, if hiring one more worker increases production by 10 units and costs $100, a firm will keep hiring until the value of those 10 units matches the $100 cost. This balance ensures that resources are used efficiently and that firms do not overpay for labor or hire too few workers.