What does MPL stand for in the context of labor input?

MPL stands for Marginal Product of Labor, which represents the additional output produced as a result of employing one more unit of labor while holding other inputs constant. This concept is crucial in understanding how labor input affects overall production levels within a firm.

When a business decides to hire more workers, the MPL helps in evaluating the efficiency and productivity of labor. If the MPL is high, it indicates that each additional worker contributes significantly to output, which can be a signal for the firm to continue hiring. Conversely, if the MPL begins to decline, it may suggest that the firm is reaching its optimal level of employment, where adding more workers yields diminishing returns. This relationship between labor and output is fundamental in production theory in microeconomics, illustrating how firms react to changes in labor input to maximize profits.

The other choices reflect different economic concepts but do not relate to the specific measure of labor input’s contribution to production, and thus are not applicable in this context.