Final answer:
The marginal product of labor (MPN) is found by determining the change in output from an additional unit of labor, with the value being the product's market price. In a perfectly competitive market, a firm maximizes profit by hiring workers until the value of marginal product equals the wage; in a monopsony, it equates the marginal cost of labor with the marginal revenue product to find the profit-maximizing employment level and wage.
Step-by-step explanation:
To find the marginal product of labor (MPN), we look at the change in output resulting from a one-unit increase in the labor input while holding other inputs constant. The value of the marginal product of labor (VMPL) is then found by multiplying this by the market price of the output.
In a perfectly competitive labor market, the firm's profit-maximizing level of employment is determined by equating the VMPL to the market wage. If the market wage is $12, the firm will continue to hire workers until the VMPL falls to $12. Beyond this point, hiring additional workers would not add enough extra output to cover the cost of their wages.
Regarding a monopsony, where a single buyer (employer) controls the market, the marginal cost of labor (MCL) must also be considered. The firm will hire workers up to the point where the MCL equals the marginal revenue product (MRP). If the MRP is $13, the profit-maximizing level of employment is where the MCL equals $13, which would also determine the wage offered.