ABSTRACT
At the end of this chapter, readers should understand:
The role of the marginal productivity in competitive labour markets in the short run and long run and in imperfectly competitive labour markets;
That the ubiquity of monopsonistic labour markets means that workers may not receive the marginal product of their labour;
That the Marshallian rules of derived demand can explain relative bargaining power of firms and workers;
That the relative demands for workers and hours may alter over the course of the business cycle;
That the degree of capital utilisation or shift-working is affected by a number of economic factors, but there is an optimal degree of idleness;
Likewise, that labour hoarding may be optimal under certain circumstances linked to the concept of labour as a quasi-fixed factor.
