c) Because of growing housing demand, the price of lumber increases. What will happen to each of the following? i. Larry's Lumber Mill's demand for labor. Explain. ii. The supply of labor 2. WAGE (S) Marginal Factor Cost Supply of Labor 25- 20 17.5 15 12.5 10 Marginal Revenue Product 25 50 100 150 200 250 300 QUANTITY OFLABOR Woodland is a small town in which everyone works for TreeMart, the local lumber company. TreeMart is a monopsonist in the labor market and a perfect competitor in the lumber market. In the short run, labor is the only variable input. The labor market for TreeMart is given in the graph above. a) Identify the profit-maximizing quantity of labor for TreeMart. 6) Identify the wage rate TreeMart pays to hire the profit-maximizing quantity of labor. c) Identify the quantity of labor hired in each of the following situations. i. TreeMart operates in a competitive labor market. ii. The government imposes a minimum wage of $12.5. Explain.1:31 II" 36 -l X unitSfactore... IQ /' Z Review Homework Unit 5: Factor Market Name: Total Marks: 10+5=15 Topics: Introduction to factor market Changes in factor demand and factor supply Prot maximizing behavior in perfectly competitive market Monopsonlstic markets 0... Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must shoimr directional changes. If the question prompts you to "Calculate,\" you must show how you arrived at your nal answer. :I D=MFIP uantlty 1 2 a 4 s ofLabor Larrfs Lumber Mill sells lumber in a perfectly competitive product market. However. Larry's Lumber Mill is the only employer of labor In the small community where it Is located. The labor market is depicted by the graph above. a] Using the labels from the graph above, identify each of the following. I. The optimal quantity of labor Larry's Lumber Mill will hire ll. The wage rate Larry's Lumber Mill will pay it} Using the labels from the graph above, identify the number of workers Larry's Lumber Mill would hire