For a firm which is not perfectly competitive, the appropriate concept is the marginal revenue product, which we define as the marginal product of labor multiplied by the firm’s marginal revenue. Profit maximizing firms employ labor up to the point where the market wage is equal to the firm’s demand for labor.

A monopsony is the sole employer in a labor market. The monopsony can pay any wage it chooses, subject to the market supply of labor.

monopsony — a labor market where there is only one employer. point where the market wage — equal to the firm’s demand for labor. discrimination — actions based on the belief that members of a certain group or groups are in some way inferior solely because of a factor such as race, gender, or religion. affirmative action — active efforts by government or businesses that give special rights to minorities in hiring, promotion, or access to education to make up for past discrimination.