When a rare skill contributes to the production of something that consumers value highly:

Question

Quizplus · Accepted Answer

When a rare skill contributes to the production of something that consumers value highly, the labor productivity of the worker is high, resulting in a high value of the marginal product. A high value of the marginal product means that the additional output produced by the rare skill is valued highly by consumers, and the firm can charge a higher price for the product. This allows the firm to pay the worker a higher wage, reflecting the higher value of their contribution to production.

When a Rare Skill Contributes to the Production of Something