Units of Wage Total Labor Marginal Resource Labor Rate Cost (Labor) Cost $14 $ 14 14 3 14 14 5 14 6 14 %24 4. On the following page, complete the labor demand table for a firm that is hiring labor competitively and selling its prod- uct in a purely competitive market. LOI a. How many workers will the firm hire if the market wage rate is $11.95? $19.95? Explain why the firm will not hire a larger or smaller number of units of labor at each of these wage rates. b. Show in schedule form and graphically the labor demand curve of this firm. Marginal Units of Total Marginal Product Total Revenue Labor Product Product Price Revenue Product 0 $2 $ 17 2 31 2 3 43 4 53 2 5 60 2 6 65 2 | |||

Units of Wage Total Labor Marginal Resource Labor Rate Cost (Labor) Cost $14 $ 14 14 3 14 14 5 14 6 14 %24 4. On the following page, complete the labor demand table for a firm that is hiring labor competitively and selling its prod- uct in a purely competitive market. LOI a. How many workers will the firm hire if the market wage rate is $11.95? $19.95? Explain why the firm will not hire a larger or smaller number of units of labor at each of these wage rates. b. Show in schedule form and graphically the labor demand curve of this firm. Marginal Units of Total Marginal Product Total Revenue Labor Product Product Price Revenue Product 0 $2 $ 17 2 31 2 3 43 4 53 2 5 60 2 6 65 2 | |||

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 32CTQ: How does fixed cost affect marginal cost? Why is this relationship important?

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