Principles of Microeconomics / Unit 13 MIC 1203 short lesson, about 20 seconds
Value of the Marginal Product
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The idea
When the firm sells at a market price, the value of the marginal product is marginal product times price. It falls as marginal product falls, and is the firm's demand for labor.
In practice
Eighteen cars at ten dollars: one eighty for the fourth worker.
Where people slip
Price is the product's, not the wage; the wage is compared with this value, not multiplied in.
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