Answer:
If the market for labor was perfectly competitive, then the wage (price of labor) would be determined by the industry, not by individual firms. Therefore, individual firms would be wage takers. The equilibrium wage would be determined by the market and the supply of labor (the workers) should be perfectly elastic.
The demand of labor = marginal revenue product. Marginal revenue product is calculated by multiplying total marginal physical output by marginal revenue per unit of output.
