**Understanding Labor Demand and Market Wage Rate**On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (*Note: If you cannot place the wage rate at the level you want, move the two end points individually.*)**Hint:** Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points.**Graph Explanation:**- **X-axis:** Represents 'LABOR (Number of workers)'- **Y-axis:** Represents 'WAGE (Dollars per worker)'- **Legend:** - **Demand** indicated by blue points (circle symbols) - **Market Wage Rate** indicated by orange line (square symbols)**Graph Illustration:**- The graph is designed to help students understand the relationship between the number of workers (labor) and the wage rate.- The blue circles (points) should be plotted to represent the labor demand curve at different levels of labor.- The orange squares (line) should represent the consistent market wage rate across different numbers of workers.Exercise: Determine the intersection of the labor demand curve and the market wage rate to find the profit-maximizing quantity of labor.**Question:**The profit-maximizing quantity of labor at the market wage is __________. ### 2. Graphing Demand for Labor and Computing the Optimal Quantity of Labor DemandedA company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires.**Task:** In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers.#### Table:| **Labor (Number of workers)** | **Output (Units of output)** | **Marginal Product of Labor (Units of output)** | **Value of the Marginal Product of Labor (Dollars)** ||-------------------------------|------------------------------|------------------------------------------------|---------------------------------------------------|| 0 | 0 | - | - || 1 | 20 | 20 | 20 || 2 | 39 | 19 | 19 || 3 | 57 | 18 | 18 || 4 | 72 | 15 | 15 || 5 | 84 | 12 | 12 |**Graph Details:** On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbol) to show the market wage.1. **Labor Demand Curve**: Represented by blue points (circle symbols), plotting the relationship between the quantity of labor demanded and the value of the marginal product of labor.2. **Market Wage**: Indicated by an orange line (square symbols), representing the constant market wage of $270.Note: The graphical representations will help in visualizing how the demand for labor changes with variations in output and will aid in determining the optimal number of workers the firm should hire to maximize profit.

2. Graphing demand for labor and computing the optimal quantity of labor demanded A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output (Units of output) Marginal Product of Labor (Units of output) Value of the Marginal Product of Labor (Dollars) (Number of workers) 0 0 20 1 20 19 2 39 18 3 57 15 4 72 12 5 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show 00000

2. Graphing demand for labor and computing the optimal quantity of labor demanded A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output (Units of output) Marginal Product of Labor (Units of output) Value of the Marginal Product of Labor (Dollars) (Number of workers) 0 0 20 1 20 19 2 39 18 3 57 15 4 72 12 5 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show 00000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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