Number of MRP of Wage Total labor Marginal labor unlts 0 0 l

Number of MRP of Wage Total labor Marginal labor unlts 0 0 labor rate cost labor cost $36 32 28 8 24 20 16 12 818 10 12 16 ?

Solution

When labour market is competitive then MRP of Labour equals Margianl Cost of Labour

MRP of Labour =Marginal Revenue Product of Labour

At MRPL=MCL=20 we have this equilibrium atleast 5 units of labour should be hired at $12 wage rate.