Question

In: Economics

Suppose a single firm has the marginal revenue product schedule for a particular type of labor...

Suppose a single firm has the marginal revenue product schedule for a particular type of labor given in the following table.

Number of units of labor MRP of labor
1 $16
2 15
3 14
4 13
5 12
6 11
7 10
8 9

(a) Assume there are 200 firms with the same marginal-revenue-product schedules for this particular type of labor. Compute the total or market demand for this labor by completing column 1 in the table below.

(1)
Quantity of labor demanded		 (2)

Wage rate		 (3)
Quantity of
labor supplied
_____ $16 1100
_____ 15 1000
_____ 14 900
_____ 13 800
_____ 12 700
_____ 11 600
_____ 10 500
_____ 9 400



Labor Quantity (200 firms):



(b) What will be the equilibrium wage rate and how many workers will be hired?

     Wage Rate: $


     Quantity:

workers

(c) What will be the marginal labor cost and wage rate for the individual firm?

     Marginal Labor Cost: $


    Wage Rate: $



(d) How many workers will the firm employ?

workers

(e) How would the imposition of a $15 minimum wage rate change the total amountof labor hired in this market?
(Increase/Decrease)

by

workers

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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