Perfectly Competitive Resource Market Profit Maximization

[KcKiller101]

I am currently learning this on an online class (i feel like I am learning this on my own). I was bored and decided to watch a video about this subject. Thanks for teaching more of it.

[scenesonn]

From what I was taught -- and perhaps I'm wrong -- the demand curve for a firm is equal to price (MR=D=AR=P) since individual firms in a perfectly competitive market are price takers rather than price dictators. The demand curve is perfectly elastic because if a firm decides to sell its product at any higher price, consumers will flock to the next supplier.

[8644371]

For the industry: In locating the optimal wage price, are we walking UP the Supply Curve or walking DOWN the Demand Curve?

[8644371]

Is it Output divided by Input?

[8644371]

How do I calculate the marginal revenue product?

Is is calculable? Is it visceral?

[onqsfe]

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[carlospfontes]

Thanks man!

Good job!

[mapleleaf11]

in the foirms side mr = d

so horizontal curve isnt the supply curve but the demand curve

[APECONREVIEWER]

Again, this is the resource (factor) market, not the product market.  `

[mapleleaf11]

and ur MC = SUPPLY ,yani mc is THE supply curve

[APECONREVIEWER]

I don't think you are understanding that this is about the "resource" market, not the "product" market.

[mapleleaf11]

i dont get why would firms supply more wages as they hire more workers.

[APECONREVIEWER]

because they need to increase the incentive to attract workers away from other industries and into this industry. Each successive worker they want to attract is giving up more elsewhere and therefore will require a higher wage in order to be enticed to a new industry

[8644371]

@APECONREVIEWER

Now with illegal workers: The same principle would apply, right?

If I offer better working conditions but NOT higher wages, they should be more incentivized to join me, right?

[iamacyborg]

Isn't it: the lower wage causes the firm to demand a greater quantity of labor, and a higher wage causes them to demand less? I think he's got it backwards saying the quantity of workers a firm employs causes them to pay successively lower wages.

It seems more like a firms demand for workers is based on the MRP for that specific worker, in that firm, which may vary. For example if employees are too expensive so a firm invests in a bunch of capital goods, the MRP per new employee goes up.

[spider49]

absolutley superb, wish you were my teacher...keep it up your spot on!

[caveboy0000]

many thanks for the video