Chapter 5 Discussion Questions: 1. Explain why MR = P for a perfectly competitive firm, while MR

Chapter 5 Discussion Questions: 1. Explain why MR = P for a perfectly competitive firm, while MR < P for a monopolyfirm. 2. "Only that portion of the MP curve that lies below AP constitutes the basis for the firm's short-run demand curve for labor." Explain. 3. "It would be incorrect to say that an industry's labor demand curve is simply the horizontal sum of the demand curves of the individual firms." Do you agree? Explain. 4. Suppose marginal productivity tripled while product price fell by half in Table 5.2. What would be the net impact on the location of the short-run labor demand curve in Figure 5.2? d the MRF the MRF i. the "Ove, competition in the MRP VMP MP diminishing $30 24 12 ($23.99) MRP Quantity of labor VMP Next. suppose that the wage rate falls to SI I .99. The MRP rule indicates that the firm Will "ow also hire the sixth and seventh units Of ema or a r: net ar $30