How is a competitive firm's demand for labor derived when labor is the firm's only variablefactor of production in the short run?
What will be an ideal response?
When labor is the only variable input for a firm in the short run, the firm's demand for labor is the marginal revenue product of labor curve.
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The base year is 2012. A country only produces Blu-ray players. The price of a Blu-ray player in 2012 was $100. The price of a Blu-ray player was $90 in 2013
The quantity of Blu-ray players produced in 2012 was 10,000 units and in 2013 was 10,500 units. Real GDP in 2012 equals A) $945,000. B) $1,000,000. C) $900,000. D) $1,050,000. E) an amount that cannot be determined without information about real GDP in 2007 .
Refer to Figure 14-1. If Lexus lowers its price, will this deter BMW from entering the market?
A) Yes, because BMW will make a smaller profit than Lexus if it chooses to compete. B) No, because BMW will be able to break Lexus' first-mover advantage. C) No, because BMW will still make a profit of $120 if it competes with Lexus. D) Yes, because BMW stands to lose $100 million if it competes with Lexus.