Answer to Question #165582 in Microeconomics for aksheeta

Question

Explain the concept of value of marginal product of labour. How is the labour demand curve related to value of marginal product of labour curve? 

Answer 1

The marginal product of labor is expenses by unit, the value of the final product, which increases with each additional unit of labor used. When the marginal costs are equal to the wage rates, no additional staff is hired. Since at this point the maximum profit is reached.