Essay
The marginal product of labor (measured in units of output)of a firm is given by
MPN = A(2000 - N)
where A measures productivity and N is the number of labor hours used in production.Suppose the price of output is $6 per unit and A = 0.002.
(a)What will be the demand for labor if the nominal wage is $18?
(b)What will be the demand for labor if the nominal wage rises to $21?
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(a)The real wage = $18/$6 = 3.Setting th...View Answer
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