The marginal product of labor (measured in units of production) for Rotona Corp. is given by MPN
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Question:
The marginal product of labor (measured in units of production) for Rotona Corp. is given by MPN = A(200 - N)
where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $3 per unit and A = 2.0.
a) What will be the demand for labor if the nominal wage is $30?
B) With the above condition, what will be the demand for labor if the government imposes a 20% sales tax on the company, assuming that the tax is not passed on to consumers?
Related Book For
Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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