Suppose the marginal product of labor equals 1/L. If the wage is $15 per unit of labor, what is the short-run effect on the firm's labor demand if the price of output in a competitive output market were to double? A) The firm will demand half as much labor. B) The firm will demand twice as much labor. C) The firm will demand the same quantity of labor. D) There is not enough information to determine.
Suppose the marginal product of labor equals 1/L. If the wage is $15 per unit of labor, what is the short-run effect on the firm's labor demand if the price of output in a competitive output market were to double? A) The firm will demand half as much labor. B) The firm will demand twice as much labor. C) The firm will demand the same quantity of labor. D) There is not enough information to determine.
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.9P
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Question
![Suppose the marginal product of labor equals
1/L. If the wage is $15 per unit of labor, what is
the short-run effect on the firm's labor
demand if the price of output in a competitive
output market were to double?
A) The firm will demand half as much labor.
B) The firm will demand twice as much labor.
C) The firm will demand the same quantity of
labor.
D) There is not enough information to
determine.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc1062c79-fc9b-4b58-acba-60805f68d2ff%2F457a92dc-9fe8-4427-8956-afe8df9f4cb9%2Fmcgon2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose the marginal product of labor equals
1/L. If the wage is $15 per unit of labor, what is
the short-run effect on the firm's labor
demand if the price of output in a competitive
output market were to double?
A) The firm will demand half as much labor.
B) The firm will demand twice as much labor.
C) The firm will demand the same quantity of
labor.
D) There is not enough information to
determine.
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