Chapter 18 - The Markets for the Factors of Production

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Marginal product of labor: increase in the amount of output from an additional unit of labor diminishing marginal product: marginal product of input declines as quantity of input increases value of marginal product: the marginal product of an input times the price of the output competitive, profit maximizing firm hires works up to the point where the value of the marginal product of labor equals the wage value of marginal product curve is the labor demand curve causes of shift in labor demand curve: output price, (labor saving) technology change, supply of other factors.

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