Asked by Claudia Holton on Jul 01, 2024
Verified
If a firm is able to charge a higher price for its output, all else equal, the value of the marginal product of labor will decrease to offset the higher price.
Marginal Product
Marginal Product is the additional output produced as a result of utilizing one more unit of a particular input, holding all other inputs constant.
- Acquire knowledge on how the value of labor's marginal product, wages, and a company's recruitment strategy are related.
Verified Answer
IP
Irina Pasiutina8 days ago
Final Answer :
False
Explanation :
The value of the marginal product of labor (VMPL) is calculated as the marginal product of labor (MPL) times the price of output. If a firm can charge a higher price for its output, all else equal, the VMPL will increase, not decrease, because the price component of the VMPL calculation has increased.
Learning Objectives
- Acquire knowledge on how the value of labor's marginal product, wages, and a company's recruitment strategy are related.