Suppose the labor market is perfectly competitive, but the output market is not. When the labor market is in equilibrium, the wage rate will:

A) be less than the marginal revenue product of labor.
B) equal the marginal revenue product of labor.
C) be greater than the marginal revenue product of labor.
D) None of the above is necessarily correct.

Marginal Revenue Product

The extra income obtained by using an additional unit of a production input while keeping other inputs unchanged.

Labor Market

The supply and demand for labor, where employees offer their services and employers seek to hire, influencing wages and employment levels.

Equilibrium

A state in a market where supply equals demand, and there is no incentive for prices to change, resulting in market stability.