Use the production data shown here on the left and the labor supply data on the right
Question:
Use the production data shown here on the left and the labor supply data on the right for a single firm to answer the following questions. Assume that this firm is selling its product for $1 per unit in a perfectly competitive product market.
Units of Labor............Total Product
0 ............................................0
1 ..........................................13
2 ..........................................25
3 ..........................................34
4 ..........................................42
5 ..........................................46
6 ..........................................48
Units of Labor.............Wage Rate
0 ..........................................—
1 ..........................................$1
2 ............................................2
3 ............................................3
4 ............................................4
5 ............................................5
6 ............................................6
a. How many workers will this firm choose to employ?
b. What will be its profit-maximizing wage rate?
c. What labor market model do these data best describe?
Step by Step Answer:
Contemporary Labor Economics
ISBN: 978-1259290602
11th Edition
Authors: Campbell R. McConnell, Stanley L. Brue, David Macpherson