Principles of Microeconomics / Unit 13 MIC 1202 short lesson, about 20 seconds
Why Firms Demand Labor
Captions available
The idea
A firm hires a worker for the revenue the output brings, so it never pays more than what the last worker adds is worth. Marginal product declines as workers share the same capital.
In practice
Eighteen more cars at ten dollars: worth one eighty.
Where people slip
Workers in one market are treated as alike; marginal product belongs to the position, not the person.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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