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FIGURE 12.1 The purely competitive seller's demand for a resource. The MRP curve is the resource demand curve; each of its points relates a particular resource price (= MRP when profit is maximized) with a corresponding quantity of the resource demanded. Under pure competition, product price is constant; therefore, the downward slope of the D = MRP curve is due solely to the decline in the resource's marginal product (law of diminishing marginal returns). P $14 12 10 8 4 2 D = MRP 2 3 4 5 6 7 8 2 Quantity of resource demanded Resource price (wage rate) 6. TABLE 12.1 The Demand for Labor: Pure Competition in the Sale of the Product (6) Marginal Revenue Product (MRP) (1) (2) Total Product (3) Marginal Product (MP) (4) Product (5) Total Revenue, Units of Resource (Output) Price (2) x (4) $2 $ 0 -7 $14 2 6 12 13- 18 2 26 -5 10 3 36 -4 4 22 2 44 3 5 25 2 50 -2 4 2 54 2 28 56 2. 67

FIGURE 12.1 The purely competitive seller's demand for a resource. The MRP curve is the resource demand curve; each of its points relates a particular resource price (= MRP when profit is maximized) with a corresponding quantity of the resource demanded. Under pure competition, product price is constant; therefore, the downward slope of the D = MRP curve is due solely to the decline in the resource's marginal product (law of diminishing marginal returns). P $14 12 10 8 4 2 D = MRP 2 3 4 5 6 7 8 2 Quantity of resource demanded Resource price (wage rate) 6. TABLE 12.1 The Demand for Labor: Pure Competition in the Sale of the Product (6) Marginal Revenue Product (MRP) (1) (2) Total Product (3) Marginal Product (MP) (4) Product (5) Total Revenue, Units of Resource (Output) Price (2) x (4) $2 $ 0 -7 $14 2 6 12 13- 18 2 26 -5 10 3 36 -4 4 22 2 44 3 5 25 2 50 -2 4 2 54 2 28 56 2. 67

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Suppose that marginal product tripled while product price fell by one-half in Table 12.1. What would be the new MRP values in Table 12.1 ? What would be the net impact on the location of the resource demand curve in Figure 12.1 ?

FIGURE 12.1 The purely competitive seller's demand for a resource. The MRP curve is the resource demand curve; each of its points relates a particular resource price (= MRP when profit is maximized) with a corresponding quantity of the resource demanded. Under pure competition, product price is constant; therefore, the downward slope of the D = MRP curve is due solely to the decline in the resource's marginal product (law of diminishing marginal returns). P $14 12 10 8 4 2 D = MRP 2 3 4 5 6 7 8 2 Quantity of resource demanded Resource price (wage rate) 6.
Transcribed Image Text:FIGURE 12.1 The purely competitive seller's demand for a resource. The MRP curve is the resource demand curve; each of its points relates a particular resource price (= MRP when profit is maximized) with a corresponding quantity of the resource demanded. Under pure competition, product price is constant; therefore, the downward slope of the D = MRP curve is due solely to the decline in the resource's marginal product (law of diminishing marginal returns). P $14 12 10 8 4 2 D = MRP 2 3 4 5 6 7 8 2 Quantity of resource demanded Resource price (wage rate) 6.
TABLE 12.1 The Demand for Labor: Pure Competition in the Sale of the Product (6) Marginal Revenue Product (MRP) (1) (2) Total Product (3) Marginal Product (MP) (4) Product (5) Total Revenue, Units of Resource (Output) Price (2) x (4) $2 $ 0 -7 $14 2 6 12 13- 18 2 26 -5 10 3 36 -4 4 22 2 44 3 5 25 2 50 -2 4 2 54 2 28 56 2. 67
Transcribed Image Text:TABLE 12.1 The Demand for Labor: Pure Competition in the Sale of the Product (6) Marginal Revenue Product (MRP) (1) (2) Total Product (3) Marginal Product (MP) (4) Product (5) Total Revenue, Units of Resource (Output) Price (2) x (4) $2 $ 0 -7 $14 2 6 12 13- 18 2 26 -5 10 3 36 -4 4 22 2 44 3 5 25 2 50 -2 4 2 54 2 28 56 2. 67
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