JAMB - Economics (2010 - No. 45)
The amount of labour hired depends on the
number of skilled labour available
skill of labour
marginal productivity of labour
price of the inputs
Explanation
The demand for an additional amount of labour depends on the Marginal Revenue Product (MRP). Firms will hire more labor when the marginal revenue product of labor is greater than the wage rate, and stop hiring as soon as the two values are equal.
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