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Explain and show graphically why a firm in perfect competition will hire labor where the MRP of labor is equal to the MFC of labor.Be sure to discuss in your answer exactly what MFC and MRP are.
Total Fixed Costs
The sum total of costs that are unaffected by changes in production levels or output.
Short-Run
A phase where production can be adjusted only by varying the amounts of variable inputs, with fixed inputs remaining constant.
Level of Output
The total quantity of goods or services produced by a company or economy at a given time.
Short Run
A time period in economics during which at least one input in the production process is fixed, affecting production capabilities.
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