The labor market and its essence and characteristics. Demand and supply of labor. The essence and form of salary.

The problem of formation and distribution of income is one of the most difficult, because it is not only economic, but also political, ideological problem.

The objective mechanism of the formation of incomes at the market economic is interaction of supply and demand with supposing commodity and goods. surely there are some moments of unfairness and fortuity, but there is not another chance to distribute incomes at the market economic.

When, the competitive firm maximizing profit solves the problem on hiring to additional unit of a resource, it first of all considers, as it will affect its profit. The firm compares with additional proceeds from the output, received at use of additional quantity of a resource, to size of increase in expenses.

Expenses for purchase of additional unit of a resource - limiting factorial costs - are equal to its price (our example - to size of wages W). The profit reaches a maximum when its gain will be equal to zero (i.e. ¶ profits = 0). From here demand of firm for a resource is defined by equality P×MP_L = W, that it is possible to write down as MP_L = W/Р, where W/Р - the real price of a resource (here a real payment for the work, expressed in terms of proexhausted production, instead of in money).

The firm employs workers until real wages W/Р are not becomes equal MPL. Where MPL - a limiting product of a resource (additional quantity of proexhausted production as a result of use of additional unit of the given resource)