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Firm's problem ( i . e . maximize profits ) :maxpo ( l , k ) - wl - rkWhich lead to the following equations:aQp
Firm's problem ie maximize profits:maxpolk wlrkWhich lead to the following equations:aQpWalPut another way,price x MPL wageprice x MPK rental rate of capital price of capitalPart A: One implication of this is that profit maximizing firms should set the marginal revenue product of labor equal to the wage rate. If men and women are equally productive MPL is the same is there an argument for a firm wanting to maximize its profit to pay women less?If the labor market is competitive, and female workers were paid less at a specific firm, would you expect them to look for other work and be hired by a different firm?Part B: Suppose workers who have many years of experience have higher marginal products ie firms depend on them more to produce their product should profit maximizing firms pay them more?
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