7. Problems and Applications Q7 Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $80 per day. Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the is $80 per day. At the profit-maximizing level of output, the marginal product of the last worker hired is 20 boxes of pencils per day. The price of a box of pencils is $ The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some workers in the paper industry switch to jobs in the pencil industry. Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both. Pencil Market 160 144 Supply Demand 128 112 96 Supply 80 Wage 64 48 Demand 16 o Quantity of Labor Use the green line (triangle symbol) to graph the new labor-supply curve faced by Leadbelly Co. (?) Leadbelly Co. 160 Demand 4 144 128 112 96 S1 Wage 64 32 16 Quantity of Labor This change causes the marginal product of labor at Leadbelly to