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The graph to the right shows firm hiring of labor for three different labor demand curves. Since the firm is too small relative to the entire labor market to affect wages, as its demand for labor increases and decreases all that changes is the number of workers hired.
In every case the profit maximizing firm hires where the marginal reveune product equals market wage. The enables us to establish a simple condition for firm equilibrium in hiring a single factor: MRP = W
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