MRP - curve is perfectly flexible. It is represented by the...

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MRP, the demand curve for labor In Figure 52, we have MRP, the demand curve for labor. This is the downward sloping curve showing a progressive fall in the productivity of labor . It enables the firm to employ more workers only at a lower wage rate. The labor market is competitive and $20 is the fixed uniform rate of wages. At this wage rate any number of workers will offer services. Therefore the labor supply
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Unformatted text preview: curve is perfectly flexible. It is represented by the horizontal straight line WS (AW = MW) curve. The rate of wages as a price of labor is equal to both the average wage and the marginal wage per worker. The demand and supply curves intersect at the point of equilibrium e . At this point a firm employs N = 4 workers and pays W = $20 as wages. This is a profitable situation for the firm....
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MRP - curve is perfectly flexible. It is represented by the...

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