If market forces cause the wage rate to vary, from the point of view of the firm the factor supply curve shifts up or down. As the wage changes the firm will increase or reduce hiring in order to keep MRP = W.

    MRP = W is the condition for factor hiring equilibrium for a single firm. As we saw in the section on Factor Demand, hiring more or less of an input that this either leads to unnecessary loss or forgone profit opportunities.

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