(a) Why does the labour demand curve slope downwards?(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100.# WorkersOutput120236348456560662(i) If the wage rate is $1,000 a week, how many workers should the factory hire?(ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now?(iii) Calculate the number of garments produced in each of the two cases above.

(a) Labor(L) demand(dd) curve slopes-downward because its shows a negative-relationship between…

Answered: (a) Why does the labour demand curve…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(a) Why does the labour demand curve slope downwards?

(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100.

# Workers	Output
1	20
2	36
3	48
4	56
5	60
6	62

(i) If the wage rate is $1,000 a week, how many workers should the factory hire?

(ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now?

(iii) Calculate the number of garments produced in each of the two cases above.

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