@@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)
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^^Determinants of Labor Demands (DL)^^ | ^^Determinants of Labor Supply (SL)^^ |
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R.O.D | P.I.N |
1. Productivity of the Resource | 1. Personal values |
2. Price of Other resources | 2. Intervention by Government |
3. Product demand | 3. Number of Qualified workers |
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Many sellers, one buyer
Monopsonies pay a lower wage and hire less than perfect competition
MRP=MFC
MFC > supply
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