The table below lists the marginal product per hour of workers in a lightbulb factory. Lightbulbs sell for $2 each, and there are no costs to producing them other than labor costs. (LO2)

a. The going hourly wage for factory workers is $24 per hour. How many workers should the factory manager hire? What if the wage is $36 per hour?

b. Graph the factory’s demand for labor.

c. Repeat part b for the case in which lightbulbs sell for $3 each.

d. Suppose the supply of factory workers in the town in which the lightbulb factory is located is 8 workers (in other words, the labor supply curve is vertical at 8 workers). What will be the equilibrium real wage for factory workers in the town if lightbulbs sell for $2 each? If they sell for $3 each?

Transcribed Image Text:

Number of workers Marginal Product: Additional light bulbs 12345670 24 22 20 18 16 14 12 8 10 9 8 10 6