2. Complete the following labor demand table for a firm that is hiring labor competitively and selling its product in a competitive market. LO16.2

units of labor	total product	marginal product	product price	total revenue	marginal revenue product
0	0		$2	$	$
1	17		2
2	31		2
3	43		2
4	53		2
5	60		2
6	65		2

a. How many workers will the firm hire if the market wage rate is $27.95? $19.95? Explain why the firm will not hire a larger or smaller number of units of labor at each of these wage rates.

b. Show this firms labor demand curve in schedule form and graphically.

c. Now again determine the firms demand curve for labor, assuming that it is selling in an imperfectly competitive market and that, although it can sell 17 units at $2.20 per unit, it must lower product price by 5 cents in order to sell the marginal product of each successive labor unit. Compare this demand curve with that derived in part b. Which curve is more elastic? Explain.