Marginal resource (labor)cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.

Question

Quizplus · Accepted Answer

Marginal resource cost exceeds the wage rate when the employer has market power in the labor market, not necessarily in the product market. In an imperfectly competitive product market, the firm faces a downward-sloping demand curve for its product, which affects its pricing and output decisions, but this does not directly determine the relationship between marginal resource cost and the wage rate.

Marginal Resource (Labor)cost Will Always Exceed the Wage Rate When