Complete the labour demand table above. Remember to put marginal product and mar
ID: 1194328 • Letter: C
Question
Complete the labour demand table above. Remember to put marginal product and marginal revenue product in between units.
b. How many workers will the firm hire if the market wage rate is $27.95? How many workers will the firm hire if the market wage rate is $19.95? Explain.
c. Show on a graph the labour demand curve of this firm.
d.Now assume that the firm is selling in an imperfectly competitive market and that, although it can sell 17 units at $2.20 per unit, it must lower the product price by $0.05 to sell the marginal product of each successive labour unit. Redetermine the firm’s demand curve for labour. Compare this demand curve with that derived in part (b). Which curve is more elastic? Explain.
Explanation / Answer
labor total product MP TR MR 0 0 0 0 0 1 17 17 34 34 2 31 14 62 28 3 43 8 86 24 4 53 10 106 20 5 60 7 120 14 6 65 5 130 10