Posted by Mariah on Monday, December 4, 2006 at 7:30pm.
Suppose that labor is the only input used by a perfectly competitive firm that can hire workers for $50 per
day. The firmâ€™s production function is as follows:
Days of Labor/Units of Output:
0/0, 1/7, 2/13, 3/19, 4/25, 5/28, 6/29, 7/29
c. Compute the demand schedule showing the number of workers hired for all wages from zero to $100 a day.
How Would this be done.
e. What happens to this demand curve if the price of output rises from $10 to $12 per unit?
Wouldn't the demand curve shift downward.
for c) you need more information, you need the price of the output. Can you assume the price is $10 per unit as suggested in e.?
Assuming output can be sold at 10 per unit, 1 worker can make $70 of output, 2 can make $130 (change=$60), 3 can make $190 (change=$60), and so on. Tada, graph the changes, and you have the firm's demand curve for workers. 10070 hire zero, 7060 hire 1, 6030 hire 4, 3020 hire 5, 2000 hire 6.
e) if output price rises, firms will want to produce more, sow they will hire more labor, demand shifts outward.
Thank you for the information.

Economic  123, Sunday, November 20, 2011 at 8:43pm
23
Answer This Question
Related Questions
 Math/Economics  Suppose that a firm has only one variable input, labor, and ...
 Math/Economics  Suppose that a firm has only one variable input, labor, and ...
 lavin  A firm has the following shortrun production function: Q = 100L + 10L2...
 Microeconomics  Cant find equations for solving for MP and AP. Suppose firms A ...
 Economics  Consider a profit maximizing competitive firm with the following ...
 economics  Suppose that for the firm below, the goods market is perfectly ...
 economics  Complete the following table for the firm below which is selling its...
 economics (micro)  2. In the table below, assume a monopsonist has the marginal...
 Microeconomics  The labor demand curve of a purely competitive seller: What ...
 Business Econ  I need my answers checked for this question, thanks. A firm's ...
More Related Questions