# What does this formula stand for? [closed]

W/Vmp = ? I think it is the marginal product....but I have really no clue....any help on this?

## closed as unclear what you're asking by Giskard, Kitsune Cavalry♦, emeryville, BKay, EnergyNumbersDec 12 '16 at 6:44

Please clarify your specific problem or add additional details to highlight exactly what you need. As it's currently written, it’s hard to tell exactly what you're asking. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

• Are you sure this isn't W=Vmp? W/Vmp should equal 1... – Lee Sin Dec 2 '16 at 19:14
• I dont know man, I really dont.... – Bak1139 Dec 2 '16 at 19:23
• Is this a homework question where they're asking you to figure out what W/Vmp equals? – Lee Sin Dec 2 '16 at 19:39
• Why on Earth would you want to know the meaning of a formula without knowing anything about the context? – Giskard Dec 2 '16 at 21:55

$W$ = Wage
$VMP$ =Value of Marginal Product
When $W/VMP$ <1, workers generate more value than they cost to pay. Hire more workers.
When $W/VMP$ >1, workers generate less value than they cost to pay. Hire less workers.
Therefore when $W/MVP$ = 1 you are purchasing your optimal amount of labour.