4. The marginal product of labour (measured in units of output) for a certain firm is MPN=A(100-N), where A measures productivity and N is the number of labour hours used in production. The price of out- put is $2 per unit.

a. If A=1.0, what will be the demand for labour if the nominal wage is $10? if it is $20? Graph the demand curve for labour. What is the equilibrium real wage if the supply of labour is fixed at 95?

b. Repeat part

(a) for A-2.0.