This figure reflects the data from columns (4) and (5) of Table 1. In this example, the firm is operating in a competitive market; therefore, it can sell all the output it produces at the prevailing market price. The value of the additional worker to the firm, the marginal revenue product (MRPL), is equal to the marginal physical product of labor times marginal revenue (or price in this case). MRPL is the competitive firm’s demand for labor. If wages are equal to $100, the firm will hire 7 workers (point e).
