Final answer:
The value of the marginal product of labor is the product of the marginal product of labor and the price of the output. It reflects the additional revenue generated by employing one more unit of labor in a perfectly competitive market.
Step-by-step explanation:
The value of the marginal product of labor is calculated by multiplying the marginal product of labor by the price of output in a firm's output market. Particularly, in a perfectly competitive output market scenario, this calculation indicates how much added value an additional worker generates for a firm.
Given the context that a perfectly competitive labor market exists and a firm sells its output at a market-determined price, a firm will continue to hire additional workers until the point where the market wage equals the marginal revenue product, which is synonymous with the value of the marginal product of labor.
Therefore, the equation for the demand for labor in economic terms becomes: Demand for Labor = Marginal Product of Labor (MPL) x Price (P), which results in the Value of the Marginal Product of Labor.