XYZ Co operates in a competitive market. Its marginal product of labor is 1/L, and it takes the wage and price as given. Derive the firm's short-run demand for labor as a function of w and p. How much labor will the firm hire if w = 2 and p = 10?
What will be an ideal response?
Setting w = p ? MPL yields w = p/L or L = p/w. At w = 2 and p = 10, the firm hires 5 units of labor.
Economics
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In one week, Mohammed can knit 5 sweaters or bake 240 cookies. The opportunity cost per sweater for Mohammed is
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If 400 apple pies are sold at $4 per pie, but 600 apple pies are sold at $3 per pie, we know: a. that the demand for pies is elastic over that price range
b. that the demand for pies is inelastic over that price range. c. that the demand for pies is unit elastic over that price range. d. nothing about the elasticity of demand.
Economics