Answer the following related questions:

(a)Outline step by step the derivation of the short run labour demand curve. Do not confuse this with the model for long run labour demand involving isoquants and the isocost curves. The first step is a description of the behavioural assumption and then derive the short run demand for labour curve. Include in your analysis an explanation of why it is called the derived demand for labour.

(b)Explain the different implications for labour demand between the case in which the output market is monopolized and the case in which it is perfectly competitive.

(c)Suppose the government imposes $t tax per worker on business

firms. What will the effect of this tax on the short run labour demand curve?

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