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Labor Output Price (D 1 ) Price (D 2 ) 0 0 $10.00 $10.00 1 16 10.00 9.50 2 31 10.00 9.00 3 45 10.00

Labor

Output

Price (D1)

Price (D2)

00$10.00$10.00
116  10.00    9.50
231  10.00    9.00
345  10.00    8.50
458  10.00    7.50
569  10.00    6.50
678  10.00    5.50

Assume that the labor market is perfectly competitive. Supposethe firm’s product demand is given by the column labeledD1. If the wage rate is $125, the firm will achievemaximum profit by hiring _____ workers.

3

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