Use the production data shown here on the left and the labor supply data on the right

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Use the production data shown here on the left and the labor supply data on the right for a single firm to answer the following questions. Assume that this firm is selling its product for $1 per unit in a perfectly competitive product market.

Units of Labor............Total Product
0 ............................................0
1 ..........................................13
2 ..........................................25
3 ..........................................34
4 ..........................................42
5 ..........................................46
6 ..........................................48

Units of Labor.............Wage Rate
0 ..........................................—
1 ..........................................$1
2 ............................................2
3 ............................................3
4 ............................................4
5 ............................................5
6 ............................................6

a. How many workers will this firm choose to employ?
b. What will be its profit-maximizing wage rate?
c. What labor market model do these data best describe?

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Contemporary Labor Economics

ISBN: 978-1259290602

11th Edition

Authors: Campbell R. McConnell, Stanley L. Brue, David Macpherson

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