Show that the real wage implied by price-setting behaviour is a constant fraction of the marginal product of labour. How does this share vary with the intensity of product market competition? Explain intuitively.
Show that the real wage implied by price-setting behaviour is a constant fraction of the marginal product of labour. How does this share vary with the intensity of product market competition? Explain intuitively.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: Earnings And Discrimination
Section: Chapter Questions
Problem 3PA
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Show that the real wage implied by price-setting behaviour is a constant fraction of the marginal product of labour. How does this share vary with the intensity of product market competition? Explain intuitively.
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