All of the following are true at the equilibrium wage in a competitive market except
A) MRP equals the wage rate.
B) The ratio of the MPP to the factor's price is the same for all factors.
C) The market demand curve for labor intersects the market supply curve of labor.
D) MRP is less than MPP.

Question

Quizplus · Accepted Answer

If MRP were less than MPP, firms would decrease the quantity of labor demanded, and the market would not be in equilibrium. In equilibrium, MRP must be equal to or greater than MPP for all units of labor.

All of the Following Are True at the Equilibrium Wage