The profit-maximizing quantity of labor is the level at which a monopsonist employer hires workers such that the marginal cost of hiring an additional worker equals the marginal revenue product (the additional revenue generated by employing that worker).
Related terms
Marginal Revenue Product: The additional revenue generated by employing one more unit of labor.
Marginal Cost: The change in total cost resulting from hiring one more worker.
Equilibrium Wage Rate: The wage rate at which the demand for labor equals its supply, leading to no shortage or surplus of workers.
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