In a perfectly competitive labor market, the equilibrium wage is determined where the supply of labor equals the demand for labor. This equilibrium occurs at the point where the marginal revenue product of labor equals the __________.

In a perfectly competitive labor market, the equilibrium wage is found when the amount of workers that employers want to hire matches the number of workers willing to work at that wage. This balance happens at a specific point where the marginal revenue product of labor, which is the extra money a company makes from hiring one more worker, equals the wage that worker is paid. For example, if a company can earn $100 more by hiring one additional employee, and the wage for that employee is also set at $100, then the labor market is in equilibrium. At this point, both employers and workers are satisfied, as companies maximize their profits while workers earn a fair wage. Thus, the equilibrium wage is determined where the marginal revenue product of labor equals the wage rate.