Figure 14.2.1 -Refer to Figure 14.2.1 above. The value of marginal product (VMP_L), or value of a marginal worker equals the wage rate, A) in panel (a). B) in panel (b). C) in both panels. D) in neither panel.

Question

Quizplus · Accepted Answer

In both panels (a) and (b), the value of the marginal product (VMP_L), or the value of a marginal worker, equals the wage rate where the VMPL (Value of Marginal Product of Labor) curve intersects the wage line. This point represents the equilibrium where the value added by the last worker hired is equal to the cost of hiring that worker.

Figure 14.2.1 -Refer to Figure 14.2.1 Above. the Value of Marginal Product