SOWWIE CAN YOU PLEASE QUICKLY RUN OVER THE SUPPLY FACTORS FOR THE MRP AND THEIR RELEVANCE ?



MRP is about the demand for labour, not the supply

MRP = Marginal Revenue Product.

MRP = MPP * MR

MRP depends on the productivity of workers and Price (marginal revenue) of the good produced. Therefore, Labour demand is a derived demand.

Wages are determined by both demand (MRP) and Supply.

• Supply of labour depends on things like
• number of qualified workers
• Time taken for qualifications
• Non monetary benefits e.t.c

Wage determination

Labels: labour markets, wages