Reply To: Marginal Productivity of Labor


Economists tend not to go beyond the general claim that entrepreneurs can use the technique of either withdrawing or augmenting some of the labor service and then note the decrease or increase in overall revenue. Of course, the entrepreneur does not have to actually conduct such an experiment, he can anticipate what would occur and then compare the result to the wage he must pay to hire that labor service in deciding whether or not to hire.

You might take a look at Book 3, Chapter 10 of Eugen von Bohm-Bawerk’s book, The Positive Theory of Capital: