On way to think about this kind of efficiency is that it maximizes surplus in the market. The green shaded area to the right is the surplus revenue enjoyed by the firm from hiring labor. This is because it pays all workers the same wage W*, even though for all but the last worker hired MRP > W.

    The yellow shaded area is the surplus enjoyed by labor because all are earning a wage of W* even though only the last worker hired required that high a wage to supply her labor.

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