How the Competitive Firm Decides How Much Labor to hire Marginal value of the Product Marginal of labor Product Marginal profit Labor Output_MPL of labor MPL=△Q△VMPL= PxMPL Wage AI Profit= VmPL-w L01234 Q0 100 100 $1,000 500 500 180 80 s800 500 300 240 60 s600 $500 $100 280 40 400 500 $100 300 20 $200 500 300 Harcourt, Inc. items and derived items copyright o 2001 by Harcourt, IncHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. How the Competitive Firm Decides How Much Labor to Hire Labor L Output Q Marginal Product of Labor MPL Value of the Marginal Product of Labor VMPL=PxMPL Wage W Marginal Profit 0 0 1 100 100 $1,000 $500 $500 2 180 80 $800 $500 $300 3 240 60 $600 $500 $100 4 280 40 $400 $500 -$100 5 300 20 $200 $500 -$300 MPL   Q/  L  Pr ofit  VMPL W