Matakuliah
Tahun
: J0114-Teori Ekonomi
: 2009
THE DEMAND FOR RESOURCES
Pertemuan 20
Significance of Resource Pricing
•
•
•
•
Bina Nusantara University
Money-Income Determination
Cost Minimization
Resource Allocation
Policy Issues
3
Marginal Productivity Theory of
Resource Demand
• Resource Demand as a Derived Demand
• Marginal Revenue Product
– Productivity
• Marginal Product (MP)
– Product Price
• Marginal Revenue Product (MRP)
Bina Nusantara University
4
Marginal Productivity Theory of
Resource Demand
Rule for Employing Resources:
MRP = MRC
Marginal Revenue Product (MRP)
Marginal
Revenue
Product
=
Change in Total Revenue
Unit Change in Resource Quantity
Marginal Resource Cost (MRC)
Marginal
Resource
Bina Nusantara University
Cost
=
Change in Total (Resource) Cost
Unit Change in Resource Quantity
5
MRP as Resource Demand Schedule
(1)
(2)
(3)
(4)
(5)
(6)
Units of Total Product
Marginal
Product Total Revenue, Marginal Revenue
Resource
(Output)
Product (MP) Price
(2) X (4)
Product (MRP)
0
1
2
3
4
5
6
7
0
7]
13 ]
18 ]
22 ]
25 ]
27 ]
28 ]
$2
2
2
2
2
2
2
2
7
6
5
4
3
2
1
$0
14
26
36
44
50
54
56
]
]
]
]
]
]
]
$14
12
10
8
6
4
2
$18
16
14
12
Resource Wage
(Wage Rate)
Purely
Competitive
Seller’s
Demand for
A Resource
10
8
6
4
2
0
Bina Nusantara University
D=MRP
-2
1
2
3
4
5
6
7
Quantity of Resource Demanded
6
MRP as Resource Demand Schedule
(1)
(2)
(3)
(4)
(5)
(6)
Units of Total Product
Marginal
Product Total Revenue, Marginal Revenue
Resource
(Output)
Product (MP) Price
(2) X (4)
Product (MRP)
0
1
2
3
4
5
6
7
0
]
7
]
13
]
18
]
22
25 ]
27 ]
28 ]
$2.80
2.60
2.40
2.20
2.00
1.87
1.75
1.65
7
6
5
4
3
2
1
$ 0.00
18.20
31.20
39.60
44.00
46.25
47.25
46.20
]
]
]
]
]
]
]
$18.20
13.00
8.40
4.40
2.25
1.00
-1.05
$18
Bina Nusantara University
16
Resource Wage
(Wage Rate)
Imperfectly
Competitive
Seller’s
Demand for
A Resource
14
D=MRP
(Pure Competition)
12
10
8
6
D=MRP
(Imperfect
2 Competition)
4
0
-2
1
2
3
4
5
6
7
Quantity of Resource Demanded
7
Market Demand for a Resource
• Determinants of Resource Demand
– Changes in Product Demand
– Changes in Productivity
• Quantities of Other Resources
• Technological Advance
• Quality of Variable Resources
Bina Nusantara University
8
Market Demand for a Resource
• Changes in the Prices of Other
Resources
– Substitute Resources
• Substitution Effect
• Output Effect
• Net Effect
– Complementary Resources
Bina Nusantara University
9
Elasticity of Resource Demand
Erd
=
Percentage Change in Resource Quantity
Percentage Change in Resource Price
• Ease of Resource Substitutability
• Elasticity of Product Demand
• Ratio of Resource Cost to Total Cost
Bina Nusantara University
10
Optimal Combination of Resources
• The Least-Cost Rule
– Least-Cost Combination of Resources
Marginal Product
Of Labor (MPL)
Price of Labor (PL)
Bina Nusantara University
=
Marginal Product
Of Capital (MPC)
Price of Capital (PC)
11
Optimal Combination of Resources
• The Profit-Maximizing Rule
MRP (Resource) = P (Resource)
• Profit Maximizing Combination of Resources
PL
=
MRPL
PL
Bina Nusantara University
MRPL
=
and
PC
=
MRPC
MRPC
PC
=1
12