Market Eirm Wage Wage { -MFC D Quantity of Labor MRP Quantity of Labor The graph above shows a labor market and a typical individual firm that is hiring labor from that market. {a} If WM = WF from what type of labor market does the firm hire its workers? {b} assume the productivity of workers increases as a result of improvement in technology. What will happen to each of the following in the short run? The demand for labor (ii) The wage rate the firm will pay. Explain. (c) Suppose the firm only produces good I and that the price of good Y, a substitute good, decreases. What will happen to the optimal quantity of labor the firm will hire? Explain. [d] If the labor market were a monopsony, would the monopsonist hire more, fewer, or the same number of workers as Qy to maximize its profit? Market Firm Wage Wage MFC QM Quantity of Labor QF MRP Quantity of Labor The graph above shows a labor market and a typical individual firm that is hiring labor from that market. [a] If W W F , from what type of labor market does the firm hire its workers? {b} Assume the productivity of workers increases as a result of improvement in technology. What will happen to each of the following in the short run? The demand for labor 0 The wage rate the firm will pay. Explain. {c} Suppose the firm only produces good X and that the price of good Y, a substitute good, decreases. What will happen to the optimal quantity of labor the firm will hire? Explain {d} If the labor market were a ntonopsony, would the