In a competitive market for labor, the equilibrium wage always equals the value of the marginal product.

Question

Quizplus · Accepted Answer

In a competitive labor market, the equilibrium wage is determined where the supply of labor equals the demand for labor, and this equilibrium wage typically equals the value of the marginal product of labor, as firms hire additional workers up to the point where the cost of hiring an additional worker (the wage) equals the additional revenue generated by that worker (the marginal product).

In a Competitive Market for Labor, the Equilibrium Wage Always