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Equilibrium in the Labor Market

Equilibrium in the Labor Market The market labor demand curve is the horizontal sum of the individual labor demand curves of all producers. Here the equilibrium wage rate is W*, the equilibrium employment level is L*, and every producer hires labor up to the point at which VMPL = W*. So labor is paid its equilibrium value of the marginal product, the value of the marginal product of the last worker hired in the labor market as a whole.