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…

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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

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