The information below is for a competitive labor market. A. Calculate the value of the marginal product of labor at X. B. Find the equilibrium wage. C. Find the equilibrium quantity of labor employed. MarginalProduct ofLabor10Quantity ofLabor DemandedValue ofMPLPrice100150200250$40$30$20$5$514Quantity of LaborSupplied50Wage100200300$10$20$30$405555

When offer and demand square measure equal, the labour market is in equilibrium, and E* staff square measure paid w*. during a good world, everybody trying to {find|searching for} work on the going wage are ready to find work. constellation P represents the surplus of the producer, whereas constellation letter of the alphabet represents the excess of the employees. the additional production that happens from adding one unit of associate degree input, like labour, to the prevailing combination of productive parts is understood because the marginal product of that input. The confluence of labour offer and demand determines the equilibrium market wage rate. staff square measure employed till the extra price of hiring them equals the extra sales revenue from commercialism their output. once there's no inadequacy or surplus of a product on the market, it's same to be in equilibrium amount. the quantity of associate degree item that folks would like to shop for intersects with offer and demand. is up to the quantity being equipped by its producers.(a). The value of marginal product of labor (MPL) is calculated as Value of MPL = (Marginal product of labor)*Price When the quantity of labour demanded is $100, the marginal product of labor is 10 and the price of the product is $5. Hence, Value of MPL = 10×$5 = $50 Hence, the value of the marginal product of labor at X is $50. (b). The optimum quantity of labor demanded is value of MPL = wage. When the wage is $40, the quantity of labor demanded is 150and the quantity of labor supplied is 300. When the wage is$30, the quantity of labor demanded is 200 and the quantity of labor supplied is 200. When the wage is$20,the quantity of labor demanded is250and the quantity of labor supplied is 100. The quantity of labor supplied is equal to the quantity of labor demanded when the wage is $30. Hence, the equilibrium wage is $30. (c). At the equilibrium wage of $30, the quantity of labor demanded is equal to the quantity of labor supplied at 200. Hence, the equilibrium quantity of labor employed is 200.

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The information below is for a competitive labor market. A. Calculate the value of the marginal product of labor at X. B. Find the equilibrium wage. C. Find the equilibrium quantity of labor employed

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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