XYZ Co operates in a competitive market. Its production function is q = L?K?. The exponents, ? and ?, are both less than 1. The firm's capital is fixed, and it takes the wage and price as given
Derive the firm's short-run demand for labor as a function of K, w, and p. How does the firm react to an increase in the wage rate?
MPL = ?L?-1K?. The firm sets w = p(?L?-1K?). Rearranging to solve for L yields L = (w/p?K?)1/(?-1). Since a < 1, L increases when p and K increase, and decreases when w increases.
Economics
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In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from
A) point a to point e. B) point a to point b. C) point a to point c. D) point a to point d.
Economics
For a monopoly able to perfectly price discriminate, the marginal revenue curve coincides with the demand curve
Indicate whether the statement is true or false
Economics