SELECT * FROM question_mgmt as q WHERE id=10306 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=60 AND chapterId=612 and ex_no='1' AND status=1 ORDER BY CAST(question_no AS UNSIGNED) CBSE Free NCERT Solution of 12th micro-economics Market Equilibrium how is the optimal amount of labor determined in a

Question:

How is the optimal amount of labor determined in a perfectly competitive market?

Answer:

A profit maximising firm will employ labour up to the point where the extra cost incurred by employing the last unit of labour (wage) equals the additional benefit it earns by employing that unit of labour.
That is, Marginal cost of labour = Marginal benefit by labour
Or, Wage rate = Marginal Revenue ProductL
Or, w = MRPL
Or, w = MR × MPL (as MRPL =MR ×MPL)
Or, w = P× MPL (in Perfect Competition Price = MR)
Or, w = VMPL (because VMPL= P ×MPL)
The demand for labour is derived from VMPL and the supply of labour is positively sloped. The equilibrium exists at E, where the demand for labour and the supply of labour intersect each other. The equilibrium wage rate is w and optimal amount of labour is qL.


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=10306 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Micro Economics

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=10306 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Micro Economics

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


NCERT Solutions

Quick Links

Resources

Support