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Question: suppose firm a sells its output in a perfectly competitive...

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1. Suppose Firm A sells its output in a perfectly competitive market at a price of $10 per unit. The a wage rate of $200 per labor firm also hires its labor in a perfectly competitive market at Complete the table for MPL1 and MRP1 MRP MRP2 of Laborers Total Product MPL 60 400 3 95 35 350 4 128 313 330 153 25 250 6 168 15 150 173 50 170 30 a. What is the maximum wage the firm would be willing to pay laborer #4? $330 b. At a wage of $200 per day, how many laborers will the firm hire? c. Suppose, due to a lack of popularity, the price of the good drops to $7.50 per unit. Calculate the new values for marginal revenue product for the MRP2 column ge rate of $200 per d. Given the change n Part C, how many laborers will the firm hire at a wi day? Explain how the change in labor demand reflects the concept of derived demand. e. gnore the change in product price in part C. Now suppose that a new technology increases labor productivity by 10 units for each laborer. How would the firms demand for labor change? Demand for labor would increase at the firm because M RP would increase

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