3B. Short-Run (cont.)

• Price-taker in labor market: Then always MEL = wSo hire until MRPL = wSo MRPL curve is labor demand curve.

• Price-taker in output marketThen always MRPL = MPLxP

• So in competitive markets hire until MPLxP = w or MPL= w/P

• MPL slopes down ? DL slopes down

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