Derive labor demand curve by using market wage levels at 12$, 10$, 9$, 8$ as the market price for the product is 1$? SolutionMarginal Product simply meanschange in output resutingthe employment af an additional unit of Labon .fromChange in outputc hainge in labounMP =And valueof the Manginal Product meansmarcket price × Marginal ProductNumben of output Manginal value afvalue of MarginalWorkensEmployedconits) Product Maaginal Product$)| Product )(Marcket Price=2$cunits) (Maket Prices 1$1.8.1X8 = $82x8 = $ 16222141x14= $142x14 = $2836142×14 = $142x14=$2856201x 20 =$2O2X20 =$4070141x14 = $142 X14 = $28781x8=$82 X8 = $ 16

Firm will choose the labour so as to maximize their profit. The condition which ensures the profit…

Business

Economics

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Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 17P

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Question

Derive labor demand curve by using market wage levels at 12$, 10$, 9$, 8$ as the market price for the product is 1$?

Solution
Marginal Product simply means
change in output resuting
the employment af an additional unit of Labon .
from
Change in output
c hainge in laboun
MP =
And value
of the Manginal Product means
marcket price × Marginal Product
Numben of output Manginal value af
value of Marginal
Workens
Employed
conits) Product Maaginal Product$)| Product )
(Marcket Price=2$
cunits) (Maket Prices 1$
1.
8.
1X8 = $8
2x8 = $ 16
2
22
14
1x14= $14
2x14 = $28
36
14
2×14 = $14
2x14=$28
56
20
1x 20 =$2O
2X20 =$40
70
14
1x14 = $14
2 X14 = $28
78
1x8=$8
2 X8 = $ 16

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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