4. Competitive labor market equilibrium A company operates in a perfectly competitive market, selling each unit of output for a price of $30 and paying the market wage of $375 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRP) at each quantity of workers Marginal Revenue Product (Dollars) Labor Input Total Output Marginal Product (Number of workers) (Units of output) (Units of output) WAGE RATE (Deters per day) 350 0 300 2 On the following graph, use the blue points (orcle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. Line segments will automatically connect the points. (Note: If you cannot place the wage rate at the level you want, move the two en points individually.) 200 0 16 31 45 Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the marginall revenue product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. AAAAA 16 15 14 11 QUANTITY OF LABOR (Workers per day) The profit maximizing quantity of labor at the market wage is 6 Demand 1 Market Wage Rate
4. Competitive labor market equilibrium A company operates in a perfectly competitive market, selling each unit of output for a price of $30 and paying the market wage of $375 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRP) at each quantity of workers Marginal Revenue Product (Dollars) Labor Input Total Output Marginal Product (Number of workers) (Units of output) (Units of output) WAGE RATE (Deters per day) 350 0 300 2 On the following graph, use the blue points (orcle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. Line segments will automatically connect the points. (Note: If you cannot place the wage rate at the level you want, move the two en points individually.) 200 0 16 31 45 Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the marginall revenue product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. AAAAA 16 15 14 11 QUANTITY OF LABOR (Workers per day) The profit maximizing quantity of labor at the market wage is 6 Demand 1 Market Wage Rate
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4. Competitive labor market equilibrium
A company operates in a perfectly competitive market, selling each unit of output for a price of $30 and paying the market wage of $375 per day for
each worker it hires.
In the following table, complete the column for the marginal revenue product of labor (MRP) at each quantity of workers.
Labor Input
Total Output
(Number of workers) (Units of output)
Marginal Product Marginal Revenue Product
(Units of output) (Dollars)
WAGE RATE (Delars per day)
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. Line segments will automatically connect the points. (Note: If you cannot place the wage rate at the level you want, move the two end
points individually.)
500
Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the marginal
revenue product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1.
400
400
350
300
200
200
16
31
45
56
150
900
16
15
14
11
QUANTITY OF LABOR (Workers per day).
The profit-maximizing quantity of labor at the market wage is
-0
Demand
00000
1
Market Wage Rate
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