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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
162 Chapter 6
the marginal productivity theory is illustrated in Figure 6.2 assuming labour to be the only factor of
production.
e MRP curve of labour is given by the MRP
L
curve in panel (a) of Figure 6.2. Given the MRP
L
curve, the number of workers to be employed will be determined by the point where MRP
L
= wage
rate. For example, if wage rate is given at OW
3
a prot-maximizing rm will employ labour where
OW
3
= MRP
L
. is condition is fullled at point P. Point P indicates that at wage rate OW
3
only OL
1
number of workers will be employed. When wages go down to OW
2
, demand for labour increases
from OL
1
to OL
2
and when wage rate goes fur ...
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Publisher Resources

ISBN: 9788131797655