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The demand for labour in the short run can be derived by examining the firm's short-run output and employment decisions. Suppose in a perfectly competitive
The demand for labour in the short run can be derived by examining the firm's short-run output and employment decisions. Suppose in a perfectly competitive labour market, where the firm can hire more or less of the production factors without affecting the market price.
a)Explain step by step the derivation of the short-run labour demand curve.
b)Present and discuss the profit-maximizing decision rules for the employment of the variable input.
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