Achieved when all firms equate input marginal revenue product and marginal cost (maximize profits)
net marginal revenue
Equation 7.10 must hold for profit maximization because its right-hand side is just another expression for marginal cost. Solving Equation 7.10 for PL results in
PL = MRq X MPl or, because MRQ X MPL is defined as the marginal revenue product of L,
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