effort. Thus, marginal product depends on the capital and technology with which workers have to work.

A typist can type more pages per hour with an electric typewriter than a manual typewriter, and the typist can

type even more pages per hour with a personal computer and word processing software. A ditch digger can dig

more cubic feet of dirt in an hour with a backhoe than with a shovel.

Thus, we can define the demand for labor as the marginal product of labor times the value of that output to the

firm.

# Workers (L) 1 2 3 4

MPL

4 3 2 1

TABLE 14.1 Marginal Product

of Labor

FIGURE 14.2 Marginal Product of Labor Because of fixed capital, the marginal product of labor declines as the

employer hires additional workers.

On what does the value of each worker’s marginal product depend? If we assume that the employer sells its

output in a perfectly competitive market, the value of each worker’s output will be the market price of the
product. Thus,
{"file_type": ".pdf", "creationdate": "2022-12-07T14:15:44-06:00", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "uploaded_via": "batch_uploader", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "batch_upload": true, "moddate": "2022-12-07T14:23:05-06:00", "file_name": "Microeconomics3e.pdf", "upload_timestamp": "2026-02-07T15:37:44.339247", "file_size_mb": 26.99, "total_pages": 597, "producer": "Prince 14.2 (www.princexml.com)", "title": "Principles of Microeconomics 3e", "creator": "PDFMiner"}