Suppose a firm's marginal product of labour is given by MPPN= 30 ? 0.5N.

Problem Three Labour Demand and Fixed Cost Of Hiring Suppose a firm's marginal product Of labour is given by MPPN = 30 0.5N. The wage rate is $20. Answer the following questions assuming that the firm has only a one-period planning horizon. Assume that there are no hiring costs. a) If the firm expects the price Of output to be $20, calculate the optimal level Of employment. b) Suppose the firm hires these workers and then the country signs a trade agreement so that the firm must sell its output at the world price, which is $10. How will this change the firm's employment level at the going wage rate? c) All else equal, identify two situations/changes under which the firm can maintain the pre-trade employment level. Also, calculate the required percentage change in each case. Now assume that there is a fixed hiring cost (FC) Of $80 per worker. d) e) If the firm expects the price of output to be $20, find the new value Of labour's marginal product. What is the optimal level Of employment? How does this compare to your answer in part (a)? If the firm hires these workers, but then finds Out that the price Of Output is $10, show how it will adjust its labour force. Briefly explain how your answer to part (e) changes if the Output price is instead $3.5. (Round your answer to the nearest integer)