 In competitive markets, a firm faces a perfectly elastic supply of labour which corresponds with the wage rate and the marginal resource cost of labour (W = SL = MFCL).In imperfect markets, the diagram would have to be adjusted because MFCL would then be equal to the wage rate divided by marginal costs.Because optimum resource allocation requires that marginal factor costs equal marginal revenue product, this firm would demand L units of labour as shown in the diagram.