N3

We will contrast equilibrium employment for firms in a perfectly competitive output market (for, say, widgets) versus those in an imperfectly competitive output market. The marginal product added by each additional worker is the same for each type of firm, and given in a list here: 1. 15 2. 14 3, 12 4. 11 5. 9 6. 8 7.6 8. 5 9.3 10. 2 In the perfectly competitive output market, widgets may be sold for a price of $10 each. However, in the imperfectly competitive output market, the firm we consider has significant power over the price offered. In particular, marginal revenue there is 11 minus the number of workers employed - l.e., MR for the first worker is $10, then $9 for the second worker, $8 for the third, .... $1 for the tenth. If you need help setting this up, look at pg. 323 in the textbook. Each type of firm must pay $75 to each of the workers they employ. How many workers does the firm in the perfectly competitive market employ? Lpc' = . What are the firm's profits (total revenue minus total wages) here? profpa* = $ How many workers does the firm in the imperfectly competitive market employ? Lic' = . What are the firm's profits (total revenue minus total wages) here? profic* = $