Studied by 137 peopleFactor markets
is a resource for companies to buy what the need to produce their goods and services.
Monopsonies
pay a lower wage and hire less than perfect competition.
Equilibrium wage
in the market: establishes the wage that firms will pay workers.
Least cost rule
marginal product of labor /price of labor= marginal product of capital /price of capital (MPL /PL= MPK /PK)
Factor markets
is a resource for companies to buy what the need to produce their goods and services
Derived demand
the demand from a resource is derived by product demand
Marginal revenue product (MRP)
the additional revenue that is generated by an additional resource/worker
Marginal factor cost (MFC)
the additional cost of an additional resource/worker
Least cost rule
marginal product of labor/price of labor = marginal product of capital/price of capital (MPL/PL=MPK/PK)
Market curve
standard supply and demand curve
Equilibrium wage in the market
establishes the wage that firms will pay workers
Determinants of Labor Demands (DL)
1. Productivity of the Resource
2. Price of Other resources
3. Product demand
Determinants of Labor Supply (SL)
1. Personal values
2. Intervention by Government
3. Number of Qualified workers
Why are the determinants of Supply and Demand Important
These factors determine the supply and demand of these quantities
Monopsonistic Markets
Many sellers, one buyer
Example of Imperfect Competition
Monopsonies which pay a lower wage and hire less than perfect competition
Note 
Flashcard (21)