Concept
Version 7
Created by Boundless
Marginal Revenue Productivity and Wages
Marginal Product and Wages
The graph shows that a factor of production - in our case, labor - has a fixed supply in the long run, so the wage rate is determined by the factor demand curve - in our case, the marginal revenue product of labor. The intersection of vertical supply and the downward sloping demand gives the wage rate.
Source
Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:
"Factor compensation."
http://en.wikipedia.org/wiki/File:Factor_compensation.jpg
Wikipedia
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