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Economics 11th Edition by William McEachern
Edition 11ISBN: 978-1305505469Economics 11th Edition by William McEachern
Edition 11ISBN: 978-1305505469 Exercise 8
FIRM'S DEMAND FOR A RESOURCE Use the following data to answer the questions below. Assume a perfectly competitive product market.
a. Calculate the marginal revenue product for each additional unit of labor if output sells for $3 per unit.
b. Draw the demand curve for labor based on the above data and the $3-per-unit product price.
c. If the wage rate is $15 per hour, how much labor will be hired?
d. Using your answer to part (c), compare the firm's total revenue to the total amount paid for labor. Who gets the difference?
e. What would happen to your answers to parts (b) and (c) if the price of output increased to $5 per unit, other things constant?
a. Calculate the marginal revenue product for each additional unit of labor if output sells for $3 per unit.
b. Draw the demand curve for labor based on the above data and the $3-per-unit product price.
c. If the wage rate is $15 per hour, how much labor will be hired?
d. Using your answer to part (c), compare the firm's total revenue to the total amount paid for labor. Who gets the difference?
e. What would happen to your answers to parts (b) and (c) if the price of output increased to $5 per unit, other things constant?
Explanation
Verified
Verified
Marginal revenue product:
Marginal reve...
Economics 11th Edition by William McEachern
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