This question involves the labor market for bakers in New York. Suppose that the bakeries all sell bread in a competitive labor market for $2/loaf and the MPL and labor supply are described by these equations: MPL = 3 - Lwhere L is the number of hours of labor Ls = 2w where w is the wage per hour Find the $ value of the MPL (VMPL) function and then the equilibrium wage and amount of labor hired. What is the equilibrium wage? $_ /hour
This question involves the labor market for bakers in New York. Suppose that the bakeries all sell bread in a competitive labor market for $2/loaf and the MPL and labor supply are described by these equations: MPL = 3 - Lwhere L is the number of hours of labor Ls = 2w where w is the wage per hour Find the $ value of the MPL (VMPL) function and then the equilibrium wage and amount of labor hired. What is the equilibrium wage? $_ /hour
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:This question involves the labor market for bakers in New York.
Suppose that the bakeries all sell bread in a competitive labor market for $2/loaf and the MPL and labor supply are described by these equations:
- MPL = 3 – L where L is the number of hours of labor
- L_S = 2w where w is the wage per hour
Find the $ value of the MPL (VMPL) function and then the equilibrium wage and amount of labor hired.
What is the equilibrium wage? $___/hour

Transcribed Image Text:(continued) The legislature was unhappy about low incomes for bakers so they instituted a minimum wage. Suppose the minimum wage was $3/hr. How many hours of labor are now demanded with the minimum wage? L<sub>D</sub> = ____ hours
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